PETALING JAYA: Tan Chong Motor Holdings Bhd
’s sales volumes are expected to stay under pressure this year amid intensifying competition from Chinese marques, according to RHB Research.
With no clear recovery strategy from management, the research house remained cautious on the group’s near-term turnaround prospects.
After adjusting for higher operational expenditure and interest expenses, it cut the group’s financial years 2025 to 2027 earnings by 14.6%, 14%, and 8% respectively.
It noted that the group’s third quarter ended Sept 30, 2025 (3Q25) core loss widened quarter-on-quarter (q-o-q) bringing nine-month (9M25) loss to RM122mil, which was down 14% year-on-year.
“This came in below our full-year loss estimate of RM144.7mil but in line with Street’s, mainly due to higher-than-expected interest and operating expenses.
“The positive growth in 9M25 was driven by stronger turnover from the automotive segment coming from higher estimated average selling prices but offset by lower sales volume,” said RHB in a note to clients.
However, core earnings before interest, taxes, depreciation and amortisation margins remained negative in 9M25, no thanks to elevated costs.
Overall, this led to weaker q-o-q results after stripping out provisions for impairment of RM8mil and other non-recurring items, the research firm said.
“While the motor segment remains in the red, we reiterate our ‘buy’ call based on the intrinsic value of its underlying assets. The bulk of the assets were revalued in 2022 and hence, we believe the book value is close to its revalued net asset value,” the research house said.
