HUh...Unsure NIssan need to change most of the models' name....."Almera, Teana, Navara,....." sound weird.....like disease.....or form of virus...HAha...no offence to Nissan enthusiasts.......
Bought some at 1.72 yesterday, 1.68 is the lowest price since 2013. It will eventually go up once gain profit from overseas investment such as Vietnam & Myanmar etc...
We believe the domestic automotive sector will remain challenging as consumer appetite is still weak with the strict financing approval guidelines in the current economic environment.
The Group will continue to remain disciplined and maintain our focus on key priorities to ensure sustainable financial position. Sales and marketing activities will be enhanced to maintain our competitiveness in Malaysia. Overseas sales and distribution are expected to continue expanding in tandem with the robust economic growth in Vietnam, Laos, Cambodia and Myanmar. However, as for Myanmar, its operations commenced production and sales activities in Q1 2017.
TChong has taken a smart move which is hedge the currency. Gain on derivative has helped them in this quarter result.
From the above, we noted that there are many people with varied views as to whether to buy or sell TChong. As for me, I look at its management and Board, they are good and transparent, treating minority shareholders reasonably well. One such example is the privilege of being invited to TCM plant visit from 8.30 am. to 3.30 p.m. on 12 July 217. Thank you
I got in at 1.82 on Thursday. Buying for long-term. At 0.42X B/V, this is considered cheap. If and when Tan Chong returns to profitability, it will eventually approach 1.0X B/V, and if the ROE can be sustained above 10% then it can possibly hit 1.2-1.4X B/V, which should mean at least a doubling or tripling of capital invested. The catch is...this may take 3-5 years to materialize. It's not a short game...it's a very long game indeed but with a good payoff potential.
Based on my risk analysis, I believe the downsides have been adequately priced in. I will top up more if the stock drops to 1.75, 1.68 etc (every 7 cents down) as long as the story hasn't changed. The few upside catalysts that will lead to a re-rating of the stock in the coming months and/or years are as follows:
1) New models launch. Tan Chong Motors has not brought in a single new model in 2017, and in 2016 they just brought in one or two minor facelifts. That means two new of almost zero updates, unlike its competitors such as Honda, Toyota and Mazda which have been actively launching brand new models here. In 2016, Tan Chong maintained that new models will be deferred to 2018. One highly rumored model is the Nissan Kicks, which should see good demand. The other is the Serena Hybrid facelift, also said to be highly sought after.
3) Stabilizing/strengthening Ringgit. In Q1 17, the Ringgit averaged RM4.43/USD, but in Q2 this has dropped to about RM4.35. This arguably means that the worst is over for the Ringgit as far as the FX with USD and JPY is concerned, and going forward there may even be a slight upwards/bullish bias for the Ringgit. Not to mention, Tan Chong would have been renegotiating cost of parts/models with Nissan Corp., which should also boost the bottomline.
4) Possibly taking over Mitsubishi distribution in Malaysia. Nissan bought a ~35% stake in Mitsubishi Motors in Japan last October. Now the entire group comprises of Renault-Nissan-Mitsubishi. Tan Chong already distributes the former two in Malaysia, so its entirely possible they will take a stake in distributing Mitsubishi cars here to streamline operations and reduce costs for the R-N-M group.
5) Low base effect. Q1 2017 saw a very small volume of Nissan cars sold in Malaysia. Their marketshare was among the lowest seen in the past 5 years. Things have recovered in the following months. Inventories have been falling these past few quarters. When we get to next year, there will be a favorable bias when doing YoY comparisons due to the low base effect.
2) Refers to Indochina growth. But i3 keeps deleting the comment. Why can't I post it? I don't even use any vurgar words or talk about politics. Can't share as it keeps getting removed, sorry.
Niki, im looking as well. But you're banking alot on hope and dreams when they are so many other companies out there that is doing well already and not fully priced in yet.
If im right, with the level of debts in australia, us, china, malaysia etc. We should be in for a recession soon. Whatever gains we have in the malaysian economy now is not due to real fundamentals, but because people feel optimistic and buy, and when people see people buy, they buy as well.
A recession is coming, debt levels is way higher than 2008. And when it comes, your turnaround play might take a very long time.
In that sense I disagree. It's not my job to predict a recession. Just buy and hold companies that WILL see a turnaround in a five year period. I do believe that Tchong fits the bill well.
Just my 2 cents. By the way if you ask me, I believe Malaysia's fundamentals will improve over the coming 3 years. 2017 Q1 GDP growth shows that we are in the beginning of such a process.
What other companies would you consider to be "safe" no-brainer investments for gains in a five year period? I believe Prlexus is one of them, Hevea is another. But I'm spreading my risk exposure in buying both "beaten down/fallen giants" and buying companies with "growth at reasonable price" such as Heveaboard. Both of course following the margin of safety concept, where you primary aim is to NOT lose money, rather than make money.
Nikicheong, what is the growth story in Indochina that you want to talk abt? How abt their new model launching in Malaysia? I do not see any new model launched thus far this year.
Enid888, this is why these are UPSIDE POTENTIAL. You have to anticipate them. If you wait for it to be in the news, the share price would have reacted already.
Now, these are not a given. Which is why you must also do a risk analysis and establish a sufficient margin of safety.
RAM downgrades Tan Chong outlook to negative, but reaffirm P1/A1 bond and corporate ratings.
Will be interesting if this results in a small sell-off on Monday. Anything below RM1.70 will be a nice buying opportunity and to top up for me (initial entry at RM1.82). Turnaround is not far off now, with a company like Tan Chong and its Nissan connections, it is hard to go wrong!
I got in at RM1.82...anyone who can buy in at RM1.75 should be even luckier!
It is in the deepest pits of hopelessness that hope emerges once more.
If you have studied Graham, Buffet and Lynch, then you know that this is a stock that screams "BUY". Of course, provided you have a long investment horizon and the patience and fortitude to believe in your picks.
Howerver, be alert...noticing that since end of 2014, has broken below RM4. Then after, achieving the lowest in every year. Hope this round is different and not going to repeat the same pattern..Huh.
Lol better buy media prima since both also fallin .. media got status quo .... tan chong on his own ... if Tey fail to boost the sales ... sooner later Nissan revoke their distribution rights ... then u all go Holland d
Not likely to be privatized, since Tan Chong does have major debt. Even then the credit rating is strong, since Tan Chong is publicly listed. If it is wanted to be taken private, the banks won't be too happy. Also Tan Chong's ownership is fragmented and no longer concentrated in a single person's hands (the family got many feuds, so hard to combine and get a controlling stake). Unlike Astro, which was mainly owned by one man and wasn't swimming in debt so relatively easy to take private then re-IPO when the market recovers.
In short, almost zero chance of being taken private or delisted. We are at the very bottom, if not darn near to it (~10% from the bottom). I.e. I see the absolute bottom being at ~RM1.42. Good buy!
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tuapuikia
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Posted by tuapuikia > 2016-04-27 13:57 | Report Abuse
bought?