Tan Chong – A Better 2H12

Tan Chong – A Better 2H12                                                                                           Market Perform

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-          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% yoy, attributed to a combination of component supply constraints and the newly-introduced responsible lending guidelines.

-          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.

Source: RHB Research - 16 April 2012