Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
Company Name: TAN CHONG MOTOR HOLDINGS BHD
| Research House: CIMB | Price Call: HOLD | Target Price: 4.75 |
Target RM4.75
The key takeaways from our lunch meeting with Tan Chong's management were 1) 1Q12 results could be weak, 2) assembly operations in Segambut could be halted as early as 2017, and 3) Tan Chong aims to triple vehicle sales during 2012-16. We retain our earnings estimates but raise our SOP-based target price for a higher target P/E of 9.4x (prev. 9.1x), still pegged to a 30% discount to our KLCI target P/E which has been raised to 13x from 12.6x. Maintain Neutral. We like DRB-Hicom for exposure to the auto sector.
The key takeaways from our lunch meeting with Tan Chong's management were 1) 1Q12 results could be weak, 2) assembly operations in Segambut could be halted as early as 2017, and 3) Tan Chong aims to triple vehicle sales during 2012-16. We retain our earnings estimates but raise our SOP-based target price for a higher target P/E of 9.4x (prev. 9.1x), still pegged to a 30% discount to our KLCI target P/E which has been raised to 13x from 12.6x. Maintain Neutral. We like DRB-Hicom for exposure to the auto sector.
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