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Business Times
27-05-2025
- Automotive
- Business Times
Maybank downgrades Malaysia's Tan Chong Motor to ‘sell' amid widening losses, competition
[SINGAPORE] Maybank Investment Bank has downgraded Malaysia's Tan Chong Motor (TCM) to 'sell', from 'hold' previously, amid widening losses, weak product appeal and intensifying competition. Despite the downgrade, Maybank maintained its target price for the Bursa-listed company at RM0.38, based on an unchanged 0.1 times its forecast book value for FY2025. TCM is the franchise holder for Nissan in Malaysia and Indo-China, as well as Renault in Malaysia and MG in Vietnam. In a report on Monday (May 26), Maybank analyst Loh Yan Jin cited increased downside risks following a recent rally in TCM's share price as the reasons for downgrading its call on the automotive company. The stock has climbed nearly 60 per cent from its 52-week low of RM0.29 to RM0.46 in recent months. 'We believe downside risks have increased following the recent rally in share price,' Loh said. TCM reported a core net loss of RM44.5 million (S$13.5 million) for the first quarter of 2025, more than double the RM18.3 million loss recorded in the same period a year earlier. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up Commenting on TCM's widening year-on-year losses, Loh said the latest results were in line with Maybank's full-year forecast of a RM147.3 million loss, but came in below the consensus estimate of a RM129.4 million loss. Revenue for Q1 2025 slipped 2 per cent to RM553 million, weighed down by continued weakness in Nissan sales, which plunged 21 per cent year on year to 1,811 units. However, Loh said the weakness in Malaysia was partially offset by growth in TCM's overseas operations, including Vietnam, Cambodia, Laos and Myanmar. On a quarter-on-quarter basis, TCM's Q1 2025 revenue rose 8.2 per cent from RM511.2 million in Q4 2024, supported by a 22 per cent increase in Nissan sales in Malaysia and higher vehicle assembly and manufacturing activity. Loh attributed this to a rebound from 'seasonally softer' year-end sales, which had been affected by intense promotions and competing model launches. As a result, core net loss for Q1 2025 narrowed by 29 per cent to RM44.5 million from RM62.9 million in Q4 2024. 'Looking ahead, we expect challenges in TCM's automotive segment to persist, underpinned by weak product appeal and intensifying market competition,' Loh said. 'Soft consumer sentiment and unattractive model launches will further weigh down its earnings.' A key re-rating catalyst, she added, would be stronger sales from new product launches or contract assembly deals, but 'visibility remains limited for now'. 'Improved operational efficiencies and better inventory management could also help enhance margins and profitability,' she said. As at 4 pm on Tuesday, shares of TCM are trading RM0.455.
Yahoo
28-02-2025
- Business
- Yahoo
Telekom Malaysia Berhad Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Predictions
Telekom Malaysia Berhad (KLSE:TM) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. It looks to have been a decent result overall - while revenue fell marginally short of analyst estimates at RM12b, statutory earnings beat expectations by a notable 23%, coming in at RM0.53 per share. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Telekom Malaysia Berhad after the latest results. See our latest analysis for Telekom Malaysia Berhad Taking into account the latest results, the consensus forecast from Telekom Malaysia Berhad's 20 analysts is for revenues of RM12.4b in 2025. This reflects a modest 6.2% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to drop 13% to RM0.46 in the same period. In the lead-up to this report, the analysts had been modelling revenues of RM12.6b and earnings per share (EPS) of RM0.44 in 2025. The analysts seems to have become more bullish on the business, judging by their new earnings per share estimates. The consensus price target was unchanged at RM7.59, implying that the improved earnings outlook is not expected to have a long term impact on value creation for shareholders. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. The most optimistic Telekom Malaysia Berhad analyst has a price target of RM8.80 per share, while the most pessimistic values it at RM4.20. Note the wide gap in analyst price targets? This implies to us that there is a fairly broad range of possible scenarios for the underlying business. One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. The analysts are definitely expecting Telekom Malaysia Berhad's growth to accelerate, with the forecast 6.2% annualised growth to the end of 2025 ranking favourably alongside historical growth of 2.2% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 4.0% per year. Factoring in the forecast acceleration in revenue, it's pretty clear that Telekom Malaysia Berhad is expected to grow much faster than its industry. The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Telekom Malaysia Berhad following these results. Happily, there were no major changes to revenue forecasts, with the business still expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates. With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Telekom Malaysia Berhad analysts - going out to 2027, and you can see them free on our platform here. You should always think about risks though. Case in point, we've spotted 2 warning signs for Telekom Malaysia Berhad you should be aware of, and 1 of them is a bit unpleasant. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
