Automobile Sector : Nissan to forge past Ghosn scandal Neutral

The media reported that Japanese prosecutors have indicted Carlos Ghosn, the former chairman of Nissan Motor, for under-reporting his income for the five years to March 2015. Ghosn and former Nissan director Greg Kelly were said to have worked together to under-report Ghosn’s income by 5 billion yen. According to The Wall Street Journal, prosecutors also accused Ghosn of underreporting his income by another 4 billion yen for the three years to March 2018.

We note three key points: 1) We believe there is a risk of conflating a legal issue with an operational one; 2)We believe it is unlikely that the near two-decade-old alliance would be unraveled but Ghosn’s exit could force a review of the alliance to address the concerns of inequality from Nissan; and 3) The strategy for Nissan remains unchanged for now. This was also emphasized by Tan Chong Motor (TCM) in its last analyst briefing. We retain a BUY and FV of RM2.10 for TCM premised on the ongoing recovery of Nissan sales here, and the prospect of new models in 2019.

Others:

Automobile Sector : Riding a low tide Neutral

NEWS HIGHLIGHTS

Domestic stock market : TH cutting exposure to stock market

Oil & Gas Sector : Petronas raises outlook for key upstream segments

Transport Sector : AirAsia, AAX slapped with RM36.1m lawsuit by MAHB

Technology Sector : China's Tencent Music raises nearly US$1.1 billion in US IPO

Source: AmInvest Research - 12 Dec 2018