Tan Chong Struggles Against Chinese Car Makers - RHB Research

Tan Chong Motor Holdings is having a rough ride this year. Sales are expected to stay weak as Chinese car brands continue to eat into its market share, and with no clear plan from management, the road to recovery looks uncertain.

RHB Research says the group’s earnings for 2025 to 2027 have been cut by roughly 8 to 15%, factoring in higher operating costs and interest expenses.

The company’s third quarter ending Sept 30, 2025, saw losses widen, bringing the nine-month total to RM122 million marking a 14% drop from last year.

“This came in below our full-year loss estimate of RM144.7 million but in line with Street’s, mainly due to higher-than-expected interest and operating expenses

“The positive growth in 9M25 was driven by stronger turnover from the automotive segment coming from higher estimated average selling prices but offset by lower sales volume,” the research firm said. 

Even with higher revenue per vehicle, core margins stayed negative thanks to elevated costs. After factoring in RM8 million in impairments and other one-off items, the quarter looked weaker than expected.

RHB points out that despite the red numbers, Tan Chong still has value in its assets. 

“While the motor segment remains in the red, we reiterate our ‘buy’ call based on the intrinsic value of its underlying assets. Most were revalued in 2022, so the book value is close to its revalued net asset value,” the note added.