Tan Chong Motor Bhd / Tan Heng Chew

[behappyalways]

Analysts see Tan Chong stuck in low profit gear

http://54.255.137.222/my/article/analys ... rofit-gear

[winston]

DATUK TAN HENG CHEW
Flagship: Tan Chong Consolidated
Net worth: RM2.3bil

AS the president of the Tan Chong empire, Tan had a net worth of RM2.297bil last year, although he was three notches down from the 20th place in 2015.

In 2015, his net worth was RM2.6bil.

At 70, Tan is still in control of the business. He is known to be a workaholic but has steered away from publicity all these years.

It was his late father, Tan Sri Tan Yuet Foh and uncle Datuk Tan Kim Hor, who co-founded the Tan Chong group. They were appointed sole distributors of Nissan and Datsun vehicles in Malaya in 1957, thereby making it the first Japanese cars sold in the country.

It was tough selling Nissan cars in those days after the Japanese occupation in Malaya, but given the various models brought in over the years, Nissan rode the tide.

The company had to undergo several broadroom tussles over the years that saw Tan emerging with control of the automotive-led empire.

Tan inherited a 22.85% share in Tan Chong Consolidated Sdn Bhd (TCC), which is the major shareholder of Tan Chong Motor Holdings Bhd (39.5%), APM Automotive Holdings Bhd (36.4%), Warisan TC Holdings Bhd (34.9%) and Hong Kong-listed Tan Chong International (35.1%).

Tan Chong Motor, APM Automotive and Warisan TC are listed on Bursa Malaysia.

Separately, Tan and family also hold 7.2% in Tan Chong Motor, APM (12.5%), Warisan (17.1%) and Tan Chong International (20.6%).

Since last year, the group has ventured into IndoChina, where it sought support from the Cambodian Government to build an automobile assembly and spare parts plant for Nissan cars.

Tan’s wife, Datuk Khor Swee Wah (aka Rosie Tan) and two of his sons, Nicholas and Christopher, are also involved in the car business, while another son, Anthony, who co-founded the Grab mobile application with Tan Hooi Ling, is busy building the e-hailing business through Grabcar. That business is said to be worth US$3bil.

Source: The Star

[winston]

not vested

Stuck at red light in 4Q19

FY19 results missed expectations at 62%/67% of our/consensus estimates as the group slipped into losses in 4Q19 on the back of lower sales volume.

TCM expects new launches to drive sales in 2020F, but intense competition from national and Japanese marques could affect profitability, in our view.

We cut our FY20-21F EPS by 56-58%. Maintain Reduce with a lower RM1.16 TP.

We prefer Bermaz and Sime Darby for exposure to the auto sector.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... A41EE19292

[winston]

not vested

Tan Chong Motor (TCM MK)
Share Price: MYR1.25
Target Price: MYR1.15
Recommendation: Sell

FY19 results marginally ahead

FY19 core earnings made up 110% of our FY estimate.

We expect FY20 to be a challenging year on sluggish vehicle sales, supply chain disruption, and higher costs from a weaker MYR, leading to a 39%-48% cut in our FY20-21E net profit.

Our new TP is MYR1.15 (-11%) as we roll forward our valuations to FY21, based on 13x PER (unchanged; sector’s valuations method). Reiterate SELL.

Source: Maybank

https://factsetpdf.maybank-ke.com/PDF/1 ... 16e39e.pdf

[winston]

MIDF Research upgrades Tan Chong, target price RM1.30

by Syafiqah Salim

KUALA LUMPUR (March 5): MIDF Amanah Investment Bank Bhd Research has upgraded Tan Chong Motor Holdings Bhd to “buy” at RM1.30 with an unchanged target price of RM1.30 and said the stock has approached its earnings inflection point.

In a note today, the research house said Tan Chong revealed its plans to launch the new Nissan Almera in the second half of the financial year 2020 (2HFY20) as the model is long overdue for replacement, having been in the market for eight years.

“Details on spec and pricing [are] not forthcoming yet, but the current generation Almera is priced at RM69,888 to RM79,888. At its launch back in 2012, management was targeting

monthly volumes of 1K-2K units/month, though actual volumes registered in the initial months of launch were much better at >2K,” it said.

The research house said the current generation Almera will turn into a barely profitable model given the significant depreciation of the ringgit.

“However, costing for the new Almera is likely to have been negotiated closer to current forex levels, which should improve the yields generated from the model, though we would not rule out some increase in end-pricing.

“We forecast an 8% year-on-year Nissan total industry volume growth off the weak base of 21,239 units in FY19. Other possible new models include the Nissan Kicks (B-segment SUV) and the new Sylphy (C-segment sedan), but these have yet to be factored into our projections. The former, in particular, fills an important gap in Tan Chong’s model mix,” said MIDF.

After the group’s weak 4QFY19 results, Tan Chong’s share price has retraced significantly as it has corrected by 30% in the past 12 months.

At 9.50am, Tan Chong shares were unchanged at RM1.14, valuing the group at RM743.79 million.

Source: The Edge

https://www.theedgemarkets.com/article/ ... rice-rm130

[winston]

not vested

Negative surprise decelerates recovery

Tan Chong Motor has entered into a settlement with RMCD for the BOD\amounting to approx. RM108m. This is a negative surprise for the group.

We cut our FY21-23F EPS to reflect the additional cost related to the BOD\payment and expect the group to stay in losses in FY21F.

Retain Reduce with a slightly lower RM1.00 TP, still based on 0.23x P/BV.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 0A3CC96B92

[winston]

not vested

U/G to BUY; TP raised to MYR1.45

Risk-reward outlook improving

We have raised FY21-23 earnings by 22%-28%, to account for an improving operating outlook at its:
(i) Malaysia and
(ii) Vietnam ops.

It has also commenced its de-carbonisation exercise, a positive start.

Its auto ops could directly benefit from MY’s upcoming EV policy, leveraging
on Nissan’s EV models.

Our TP, pegged to 16x FY22 PER (mean valuations) offers a 19% upside.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/223333.pdf
SST extension off

[winston]

The worst may be behind?

Upside from new launches and contract assembly

We keep our forecasts and HOLD rating for TCM with an unchanged TP of MYR0.80 (0.2x FY25E BV).

TCM’s 7th 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.

Source: Maybank

https://mkefactsettd.maybank-ke.com/PDFS/404104.pdf

[winston]

not vested

Tan Chong bets on innovative EVs to navigate shifting market

By leveraging its Serendah and Da Nang facilities, TCMH intends to scale up production to meet growing demand in South-East Asia, particularly in markets like Thailand, Myanmar, and Cambodia.

TCMH’s robust strategies could prove valuable going forward, as the group experienced a challenging 2024 – reporting a 17.8% decline in revenue to RM2.08bil and a net loss after tax of RM214.2mil.

Source: The Star

https://www.thestar.com.my/business/bus ... ing-market

[winston]

not vested

Tan Chong outlook clouded by a lack of new launches

We remain neutral on landbank monetisation moves, as proceeds are channelled to working capital and capital expenditure rather than shareholder returns, potentially value destructive if losses persist.

Growth in its operations in Vietnam, Cambodia, Laos and Myanmar helped partly offset the weakness in its Malaysian business.

There is still no clarity from Tan Chong’s management on the timing, location or size of potential land sales.

Source: The Star

https://www.thestar.com.my/business/bus ... w-launches