Friday, 6 April 2012

Maybank IB Research upgrades Tan Chong to Buy

KUALA LUMPUR (April 6): Maybank Investment Bank Bhd Research has upgraded TAN CHONG MOTOR HOLDINGS BHD [] to a Buy with a revised target price of RM5.38, ahead of an anticipated sector recovery in 2H 2012.

In a note Friday, the research house said that this followed a 17-18% rise in 2012-13 net profit forecasts, on higher vehicle sales assumptions (+9-21%).

“We reckon the disruption to the regional parts supply chain, margin weakness and poor Jan-Mar 2012 performance have all been priced in. Our TP (+35%), premised on 10x 2013 PER (previously 8x), offers 20% upside.

“Our re-rated PER target reflects improved optimism ahead,” it said.

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