UOB Kay Hian has initiated “buy” on Trans-China Automotive Holdings with a target price of 39 cents.

The counter is valued based on a forward price-to-earnings (P/E) range of 6 times FY2022 earnings of RMB180.2 million ($38.3 million).

“This is at a 25% discount to its dealership network and, coupled with better operating efficiency, could see its discount to peers narrow,” writes the brokerage’s Singapore research team in a Nov 26 report.

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