STOCK FOCUS OF THE DAY
Tan Chong Motor: New auto hub in Bagan Datuk HOLD
We maintain HOLD on Tan Chong Motor Holdings (TCM) with an unchanged FV of RM1.30/share based on an FY18 PBV of 0.3x. TCM in a press release on Monday said it would invest RM500mil to build an automotive hub on a 138-acre land in Bagan Datuk, Perak. It will spend RM100mil in the first phase to acquire land and build a plant to produce buses and trucks under the UD Trucks brand. Production is expected in 2021.
We believe the prospects for UD Trucks do not warrant such a major expansion given the declining sales and the under-utilization of its existing plant. We are neutral on this news. Any earnings impact will only be meaningful in the longer term. The priority for TCM is to revive Nissan sales which have fallen drastically for two years.
RETAIL RESEARCH
Stocks On Radar: Hibiscus Petroleum, Luxchem, Vitrox Corp, Shin Yang Shipping
THEMATIC FOREX
Can the USD rally last?
NEWS HIGHLIGHTS
Property Sector: SP Setia, Tradewinds in KL renewal project
7-Eleven Malaysia Holdings: Sees another block of shares traded off market
Three A Resources: 1Q earnings down 40% on higher material raw prices, forex losses
GFM Services: Proposes private placement to raise up to RM21 million
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