Tan Chong Motor Holdings Berhad

$TCHONG / 4405 (TAN CHONG MOTOR HOLDINGS BERHAD)
Research Report by RHB

$TCHONG / 4405 (TAN CHONG MOTOR HOLDINGS BERHAD)
Research Report by HLIB

$TCHONG / 4405 (TAN CHONG MOTOR HOLDINGS BERHAD)
Research by RHB

$TCHONG / 4405 (TAN CHONG MOTOR HOLDINGS BERHAD)
Research by Maybank
Not Rated – TP RM 0.80

" The worst may be behind?”

We keep our forecasts and HOLD rating for TCM with an unchanged TP of MYR0.80 (0.2x FY25E BV). TCM’s 7 th consecutive quarterly loss in 2Q24 was due to weak Nissan vehicle demand, adverse FX impact, and unprofitable overseas operations. We do not anticipate a turnaround this financial year, but the worst may be behind it, depending on effective execution. Catalysts include improved sales from new product launches and new assembly contracts in the coming quarters. Strengthening MYR is also favourable to TCM, as >90% of its purchases are denominated in USD.

Analyst:
Loh Yan Jin
lohyanjin.loh@maybank-ib.com

$TCHONG / 4405 (TAN CHONG MOTOR HOLDINGS BERHAD)
Research by HLIB
SELL – TP RM0.65

" Remain cautious despite improve 2HFY24”

1HFY24 results stayed weak due to continued slow group sales volume and margins (further affected by weakened local currencies). Malaysia market OEMs. The expected launch of new e-POWER Nissan Kicks in 4QFY24 and new GAC models in Vietnam are expected to improve the group’s sales volume from 2025 onwards. Other Indochina markets are expected to remain weak in 2HFY24. The group is expected to benefit from the recent share appreciation of RM/USD. Maintain our SELL recommendation on TCM with an unchanged TP of RM0.65 based on 12x PE on FY25 earnings.

Analyst:
Daniel Wong
kkwong@hlib.hongleong.com.my

$TCHONG / 4405 (TAN CHONG MOTOR HOLDINGS BERHAD)
Research by HLIB
SELL – TP RM0.65

" Remains in the red”

TCM reported core LATMI -RM30.8m in 2QFY24 (vs. -RM30.9m in 1QFY24; -RM46.0m in 2QFY23), which further dragged 1HFY24 to -RM61.7m (vs. -RM55.8m in 1HFY23). This was within HLIB’s expectation, but below consensus. We expect TCM’s performance to remain dragged by ongoing stiff market competition in Malaysia, while Laos, Cambodia and Myanmar markets are affected by deteriorated consumer sentiment and political uncertainty. Nevertheless, we expect improvements in 2HFY24 with the commencement of GAC distributorship in Vietnam and recent RM appreciation. Maintain our SELL recommendation on TCM with an unchanged TP: RM0.65 based on 12x PE to FY25 earnings.

Analyst:
Daniel Wong
kkwong@hlib.hongleong.com.my

Changes in Director's Interest (Section 219 of CA 2016) - DATO' TAN HENG CHEW

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DATO' TAN HENG CHEW

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

PROVISION OF FINANCIAL ASSISTANCE

Immediate Announcement on Shares Buy Back

Notice of SBB by a Company Pursuant to Section 127 (16) of CA 2016

Changes in Director's Interest (Section 219 of CA 2016) - DATO' TAN HENG CHEW

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DATO' TAN HENG CHEW

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Changes in Director's Interest (Section 219 of CA 2016) - DATO' TAN HENG CHEW

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DATO' TAN HENG CHEW

Immediate Announcement on Shares Buy Back

Changes in Director's Interest (Section 219 of CA 2016) - DATO' TAN HENG CHEW

Changes in Sub. S-hldr's Int (Section 138 of CA 2016) - DATO' TAN HENG CHEW

DEALINGS IN LISTED SECURITIES (CHAPTER 14 OF LISTING REQUIREMENTS) : Dealings Outside Closed Period

Notice of SBB by a Company Pursuant to Section 127 (16) of CA 2016

Immediate Announcement on Shares Buy Back

KUALA LUMPUR: Tan Chong Motor Holdings Bhd will likely continue to experience pressure from heightened competition in the local automotive space.

Immediate Announcement on Shares Buy Back

General Meetings: Outcome of Meeting

$TCHONG / 4405 (TAN CHONG MOTOR HOLDINGS BERHAD)
Research by Kenanga
Underperform – TP of MYR 0.74

“New “e-Power” Models no Saviour”

The all-new CBU models of hybrid “e-Power” vehicles slated for launching from 2HFY24 will be no saviour to TCHONG, given a sea of competing new models in the market especially Chinese EVs with low entry-level price points. Its operations in Vietnam will continue to be loss-making due to low utilisation. We maintain our forecasts, TP of RM0.74 and UNDERPERFORM call.

Analyst(s):
Wan Mustaqim Bin Wan Ab Aziz
wanmustaqim@kenanga.com.my

$TCHONG / 4405 (TAN CHONG MOTOR HOLDINGS BERHAD)
Research by HLIB
Sell – TP of MYR 0.65

“Staying cautious”

1QFY24 results wasdisappointing on lower-than-expected group sales volume and margins (further affected by weakened local currencies). Malaysia market remains competitive due to attractive new launches by various competing OEMs. The introduction of e-POWER Nissan Kicks in 2HFY24 is expected to improve the group’s sales volume. Similarly, the commencement of GAC distributorship in 2HFY24 in Vietnam market should improve the group’s market position. Other Indochina markets are expected to remain weak in coming quarters. Maintain our SELL recommendation on TCM with an unchanged TP of RM0.65 based on 12x PE on FY25 earnings.

Analyst(s):
Daniel Wong
kkwong@hlib.hongleong.com.my

KUALA LUMPUR: Tan Chong Motor Holdings Bhd’s losses of RM30.9 million in the first quarter ended March 31, 2024, came in below Hong Leong Investment Bank’s (HLIB Research) and consensus’ expectations by 59.4 per cent and 43.7 per cent respectively. 

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