Thursday 28 Mar 2024
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KUALA LUMPUR (April 3): Affin Hwang Capital Research has initiated coverage on Cycle & Carriage Bintang Bhd (CCB) at RM1.89 with a “Hold” rating and target price of RM1.95, based on 0.7x CY18E book value.

In a note today, the research house said CCB is the oldest Mercedes-Benz (Merc) dealer in Malaysia with the largest network of 13 sales / services outlets.

It said in 2017, competition among Mercedes dealers heated up and CCB lost market share.

“Management has since undertaken aggressive marketing campaigns / promotions and raised its capex, which will suppress 2018-20E earnings, in our view.

“We believe the challenging business outlook is largely priced-in (share price -33% yoy) and CCB’s current valuation of 0.7x P/BV, 2SD below its 5-year historical mean, looks fair,” it said.

 

 

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