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JF Apex trims Tan Chong earnings outlook

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JF Apex trims Tan Chong earnings outlook Empty JF Apex trims Tan Chong earnings outlook

Post by Cals Thu 21 Nov 2013, 18:03

JF Apex trims Tan Chong earnings outlook
Business & Markets 2013
Written by Jeffrey Tan of theedgemalaysia.com   
Thursday, 21 November 2013 11:31
KUALA LUMPUR (Nov 21): JF Apex Securities Bhd has maintained its ‘buy’ call on Tan Chong Motor Holdings Bhd at RM6.40, despite trimming its FY2013F net profit for Tan Chong to RM259 million from RM353 million.

In a note today, the research house said it is maintaining its ‘buy’ for the stock with an unchanged target price (TP) of RM7.00.

The JF Apex research team said TP is derived from 11 times FY2014F price earnings ratio (PER), based on earnings per share of 64 sen, which is in-line with the industry PER.

“We continue to be rosy on Tan Chong’s sales target of 58,000 units for FY13F, as of to date it achieved circa 70%,” said the research team.

“We reckon the robust sales volume will continue to be driven by a slew of new launches during the year.”

JF Apex said these launches include the all-new Grand Livina, all-new Serena S-Hybrid, Nissan Note and Nissan Almera.

“Currently the net profit of RM183 million for 9M FY13 made up 53% of our and consensus estimate,” said the research team.

“The dip in net profit was due to a one-off provision of RM56 million for its 74% subsidiary, Nissan Vietnam Company Limited.”

The research team said the lower net profit was also due to the increased cost incurred in manpower for the ASEAN expansion plan. It reduced the profit before tax margin for the quarter to 3.9% (3Q13) from 8% (2Q13).
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