MBSB Research has kept its earnings projections unchanged for Tan Chong.
PETALING JAYA: Analysts see no real catalyst at Tan Chong Motor Holdings Bhd
, which could lead to a rerating of the loss-making company.
Intensifying competition in the local automotive market and soft product appeal have left many adopting a “sell” call on the stock with a target price (TP) in the 30-sen range, well below its last done price of 52 sen a share.
Maybank Investment Bank Research, for instance, has kept its “sell” call on Tan Chong and lowered its TP to 36 sen a share (from 38 sen) due to the challenging outlook for its core auto marketing business with little to look forward to from its land sales.
“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,” it noted in its latest report on the company following Tan Chong’s second-quarter financial filing with the exchange last week.
Tan Chong reported a core net loss of RM60.3mil for the first half of 2025 (1H25), partly due to foreign-exchange losses and a 2% year-on-year (y-o-y) drop in revenue to RM1.1bil, as Nissan sales fell by 26% y-o-y to 3,395 units.
Growth in its operations in Vietnam, Cambodia, Laos and Myanmar helped partly offset the weakness in its Malaysian business.
MBSB Research noted Tan Chong’s revenue contribution from Vietnam surged 3.3 times in the second quarter ended June 30 (2Q25), likely supported by the expanding footprint of the GAC Motor brand there.
The research house kept its earnings projections unchanged for Tan Chong, but noted it has yet to include the projected sales volume for its TQ Wuling venture in Malaysia, which is targeted for launch in 4Q25 though initial contributions are likely to remain modest.
It also has a “sell” call and TP of 34 sen a share on Tan Chong, a valuation that is based on its financial year 2026 price-to-book value per share of 0.1 times and reflecting the absence of major compelling new launches to drive an earnings recovery at the company.
RHB Research, meanwhile, maintained its “buy” call on Tan Chong with a lower TP of RM1.08 a share (from RM1.12) that is based on the intrinsic value of its underlying asset, although the realisation timeline is uncertain at this juncture.
While noting it expects Tan Chong’s auto sales volume to remain under pressure this year, largely due to the growing influx of China marques that continue to heat up competition, RHB Research said the stock is attractive from an underlying asset angle and the disposal or development of its landbank could unlock re-rating potential.
However, there is still no clarity from Tan Chong’s management on the timing, location or size of potential land sales.
