Tan Chong Motors (Initiating Coverage): Growth fuelled by expansion

Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD

Research House: ECMLIBRA

Price Call: HOLD

Target Price: 4.72

HOLD, TP: RM4.72

We initiate coverage on Tan Chong Motor Holdings (TCM), a sole distributor for Nissan Motor Co. Growth for the Group is expected to come from the introduction of new/upgraded models, contract assembly and strategic expansion into the Indochina markets. We recommend a HOLD with DCF-based target price of RM4.72 as we view that the local auto industry is already saturated-abogged down by a pedestrian TIV growth (average 2.2% pa) as well as stricter hire purchase policies (refer to report for details)

Source: ECM Newz Bits 29 March 2012, Full PDF Report