KUALA LUMPUR (April 16): RHB Research Institute Sdn Bhd has maintained its Market Perform call on TAN CHONG MOTOR HOLDINGS BHD [] (TCM) and lift our fair value to RM4.60 (from RM4.20), and said Tan Chong will likely report relatively weak 1Q earnings after MAA data for the first two months of 2012 showed combined Nissan and Renault sales down 16.7% year-on-year, attributed to a combination of component supply constraints and the newly-introduced responsible lending guidelines.
The research house said in a note Monday that Nissan Vietnam (NVL) was likely to remain loss making in 2012 although Indo-China continues to hold long-term promise given their large populations and growing middle class.
“TCM’s Danang assembly plant is now expected to commence production in Jan 2013 that will help to lower selling prices. Nissan’s B-segment competitor the Almera is scheduled for a Sep launch with initial CKD production already begun,” it said.
Further out, there are plans to reintroduce the Datsun brand into the local market with an A-segment model scheduled for 2014 that could be priced in the sub-RM60k bracket, it said.
“We reiterate our Market Perform call on Tan Chong and lift our fair value to RM4.60 (from RM4.20), derived from applying a 13x (from 10x) target PER to revised 2012 earnings,” it said.
The research house said in a note Monday that Nissan Vietnam (NVL) was likely to remain loss making in 2012 although Indo-China continues to hold long-term promise given their large populations and growing middle class.
“TCM’s Danang assembly plant is now expected to commence production in Jan 2013 that will help to lower selling prices. Nissan’s B-segment competitor the Almera is scheduled for a Sep launch with initial CKD production already begun,” it said.
Further out, there are plans to reintroduce the Datsun brand into the local market with an A-segment model scheduled for 2014 that could be priced in the sub-RM60k bracket, it said.
“We reiterate our Market Perform call on Tan Chong and lift our fair value to RM4.60 (from RM4.20), derived from applying a 13x (from 10x) target PER to revised 2012 earnings,” it said.
