KUALA LUMPUR (Sept 2): Hong Leong Investment Bank (HLIB) Research has maintained its “sell” rating on Tan Chong Motor Holdings Bhd (TCM) at RM1.12 with an unchanged target price (TP) of 75 sen and said TCM’s first half ended June 30, 2022 (1HFY22) results were a disappointment, on lower-than-expected margins and higher-than-expected tax expenses.

In a note on Friday (Sept 2), the research house nevertheless said the 1HFY22 was still an improvement year-on-year, on stronger domestic sales volume. Indochina contribution was relatively flattish year-to-date.

“While we expect an improvement in 2022, we are still relatively concerned on the continued stiff competitive domestic market environment as well as USD appreciation against ringgit.

“Maintain our 'sell' recommendation on TCM with unchanged TP: RM0.75 based on unchanged 8x PE to FY24 earnings,” it said.