Tuesday, July 10, 2012

Tan Chong Motor: Maintain Buy - Here Comes a New Challenger!

Reiterate BUY, TP of MYR5.38. We expect the upcoming launch of the B-segment Almera to be a hit and become TCM's best-selling model over the next 12-18 months. This would lift earnings growth over the next two years. No change to our earnings forecasts based on 2012-13 vehicle sales forecasts of 36k and 42k respectively (2011: 32k). Our TP of MYR5.38 at 10x FY13 PER is premised on historical average with slight premium to reflect our optimism in TCM's improving prospect.

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Source: Maybank Research - 10 July 2012

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