Tan Chong Motor gets upgrade on risk reward balance


Apart from the Almera Black edition, it said there were no other new models in the pipeline.

PETALING JAYA: With Tan Chong Motor Holdings Bhd’s risk-reward now balanced due to its recent share price decline, AmInvestment Bank Research has upgraded it to a “hold”.

The share price of the auto group has fallen by about 12% year-to-date, dragged down by its weaker fourth-quarter 2023 results.

“Due to the share price decline, the risk-reward is now balanced, with only an 8% gap to our fair value (of 80 sen).

“Hence, the upgrade to our recommendation,” said the research firm in a report.

It added that the group’s management has recommenced a share buyback with a total purchase of 45,000 shares in the past month. This purchase is part of its approval on June 1, 2023 to buy back up to 10% of its issued shares.

“However, we note the current pace of the share buyback is not convincing with the aggregate purchase less than 0.2% since the approval of the programme,” it added.

The research firm said it had visited two Nissan showrooms over the past week and noted that there was a crowd with people testing out Nissan cars, in particular, the Almera Black edition.

“The salesman said reception to this model has been positive. Stock of the Almera Black edition is readily available with a delivery period of seven to 10 days upon financing approval,” it added.

Apart from the Almera Black edition, it said there were no other new models in the pipeline.

According to the research firm, there are no “freebies” or “extra” discounts conferred, which it found perplexing as every showroom at other marquees that were visited were dangling carrots as part of the Hari Raya promotions.

Tan Chong shares are currently trading at 0.22 times the financial year 2024 price-to-book value, which is 10% higher than its three-year historical average.

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