Tan Chong, Proton up after OSK Research remains overweight on auto sector

The share prices of TAN CHONG MOTOR HOLDINGS BHD [] and PROTON HOLDINGS BHD [] rose on Monday, September 27 after OSK Research said it remained overweight on the Auto sector.

At 9.30am, Tan Chong rose 23 sen to RM5.89, Proton was up 11 sen to RM5 while component makers APM Automotive added 15 sen to RM4.70 and Delloyd gained three sen to RM3.05.

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 year-to-date, 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.

Tan Chong is OSK Research's 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.


Written by Surin Murugiah
The Edge Malaysia