Stock Name: TCHONG
Company Name: TAN CHONG MOTOR HOLDINGS BHD
Research House: OSK

KUALA LUMPUR: OSK Research said the total industry volume (TIV) for vehicles in August got a boost from the rush in pre-Raya sales.

It said on Monday, Sept 27 that being suitable for the Hari Raya exodus, MPVs and SUV/4WDs were the flavour of the month although sales in the sedan segment continued to be encouraging.

'Growth was a strong 16.5% growth YTD but we expect sales to weaken going forward due to seasonality, and hence maintain our TIV projection at 585,719 units (9.1% on-year growth) for 2010,' it said.

Despite the weaker quarter, it expected earnings to be cushioned by the strong ringgit which have reached a record 13 year high.

OSK Research remained OVERWEIGHT on the Auto sector as its outlook is likely to remain favourable up to next year given that valuations attractive, with Tan Chong (BUY, TP RM7.29) being its top sector pick for its sound fundamentals and earnings trajectory in view of its growing exposure in the Indochina market, which is still at its infancy.