2CC - 2 Cheap Cars Group

[Buzz]

Can't help myself wondering if he's factoring in that National are odds on favorite to win the election and have stated they will remove all incentives on hybrids PHEV's and EV's which seems to be what 2CC's mostly stock.  I suppose in the short term this might boost sales of that type of vehicle pre-election but after that...

Disc: don't own 2CC

But, your summary of the National government policy is not correct, nor is it necessarily an issue for 2CC. Remember, is only first time in NZ new or used 'registrations' of vehicles that the CCD scheme affects, i.e. imports that are sold, registered and then qualify for the buyers discount or fee [it has absolutely no financial effect whatsoever on the seller].

The CCS scheme which affects importers may be unaffected under National, unless ACT have their say as they want to repeal that as well. In any event, one would need to know the finer details about the percentage of ICE vs EV/BEV/PHEV vehicles 2CC import (new or used) to understand the effect that CCS has on them as importers, in terms of emissions credits, or $ fees. Secondly, one would also need to know the percentage of sales of 'new or used' vehicles, before those CCS credits or fees apply, as the credit or fee does not apply at all until the vehicle is sold and is registered by the buyer.

There is no doubt that the CCD/CCS schemes have distorted the market, and it seems that 2CC have figured out how to leverage the schemes to their advantage, however it doesn't stand to reason that the removal of the CCD scheme will have any effect on 2CC whatsoever. And, it is just a guess as to whether removal or a change to the CCS scheme is a big deal to 2CC, as it may not be removed and even if it is, there's no indication yet of how or even if, it might be changed.

Remember, all vehicle importers and dealers are in the same boat, all of them are affected by the schemes, all of them pivoted their business models as the schemes came in, and all of them will pivot again if the schemes are repealed or changed.

[Basil]

Fair comment except Turners source the vast majority of their cars locally so are less affected by any changes.
Disc Own Turners shares.

[lorraina]

Fair comment except Turners source the vast majority of their cars locally so are less affected by any changes.
Disc Own Turners shares.

Although this is correct a great number of their sales come from on behalf sales.I think this about 50% of sales.These cars are not owned by Turners.Turners receive a commission selling them.
So where to do they buy their cars.People offering them at their sites.?Buying on trade  me,Fleet sales.?
There fore they have to take what is offered,.?
2CC have their buyers in Japan buying from auctions.I think David Sena spends half his time in Japan buying.
This means 2CC can buy the cars they WANT and can react to NZ buyers' demands straight away.
I have no reason to say anything against Turners.I think they run a fantastic business,however 2CC are running a very good business.
Both CMO,[mc$300mil] and TRA,[mc$309mil] are over 10 times the market cap of 2CC [mc $27.78mil]  .
2CC's business model is simple and scalable.Their balance sheet is very strong.Their operating cash flow is great,,as are their stock turns.


PS.CMO have to sell what their franchise covers.No choice...lol.

[Buzz]

Fair comment except Turners source the vast majority of their cars locally so are less affected by any changes.
Disc Own Turners shares.

The vehicle importer earns carbon credits on low emission vehicles when the vehicle is first registered in NZ (that's the CCS scheme). So the vehicle costs no more or less to buy and import, but if it's low emission, the importer effectively 'makes money'. These carbon credits can be monetised by selling them to other importers or used to offset fees. Of course this is not available to a dealer whose vehicles were purchased in NZ.

So if 2CC skew their imports to low emission vehicles, they stand to make more money than they would have, had they bought the vehicle in NZ and sold it. It doesn't necessarily correlate that Turners who buy their vehicles in NZ, are better off than an importer of vehicles.

It's no coincidence that Tesla has made record profits in NZ, being solely BEV imports.

[lorraina]

NZSA have done a great job safe guarding minority shareholders, by getting David Sena to agree to not use the "creep" option to increase his shareholding after the current "Eugene Williams" deal for 3 years.
NZSA are therefore endorsing the "Williams" deal

.https://www.rnz.co.nz/news/business/497771/nzsa-strikes-deal-to-protect-2-cheap-cars-minority-shareholders-after-proposed-share-sale

[LoungeLizard]

Not sure about all the hype around 2cc. If it looks like a bubble...

Even at the current resurgent SP, investors have lost 50% of their stake from 2 years ago. Have they turned a corner? Maybe, but extrapolating a short term growth spurt has been the undoing of many an investor, including me. Even for traders, the low liquidity makes for a choppy TA. I'm "steering" clear.

Disc. Not a holder, but have a stake in Turners.

[lorraina]

INCREDIBLE.

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/2CC/418984/403909.pdf

[winner (n)]

Share price could go over $1 by end of week

Especially if dividend hounds get excited with that 10 cent divie coming

[Left Field]

Just interrupting my holiday to congratulate Percy/Lorraina and other holders.

2CC has been one of the most successful calls of the year.... from lows of 22c to highs (to date,)  in the 80c range...up well over 200% in 5 months with some generous dividends ( perhaps 10c)  and more capital appreciation yet to come.

A life changing investment decision. Well done and congratulations.

[lorraina]

http://nzx-prod-s7fsd7f98s.s3-website-ap-southeast-2.amazonaws.com/attachments/2CC/419601/404675.pdf
CEO adding to his holding.
I also added to the wife's holding this morning.

[Left Field]

Holders should be happy.... margins up 41% even tho' vehicle sale numbers down 12%...

https://www.nzx.com/announcements/421650

2 Cheap Cars Group Limited (NZX:2CC) has today reported a record $3.2m net profit after tax (NPAT) for the half year to 30 September 2023 (HY24), an increase of $2.6m over HY23.

Summary of key results
(Figures quoted are in NZ dollars. Comparisons are made against HY23)
• Revenue and income: $41.9 m, increased 4%
• Gross margin YTD: $10.1m, up 41%
• Underlying EBITDA including finance income: $5.7m, up $3.0m
• Net profit after tax (NPAT): $3.2m, up $2.6m
• Underlying net profit after tax (NPAT): $3.2m, up $2.2m
• Underlying earnings per share (EPS): 6.9 cents per share (cps) vs 2.3cps
• Vehicle sales: down 12% to 3,776

Plus upgraded expectations

Following the strong finish to the half year, and a pleasing October result with continued strong margins, the Company is increasing FY24 net profit after tax (NPAT) guidance to be above $6.8m, up from between $5.2m and $5.7m as previously communicated in September.

[lorraina]

Outstanding result well received by the market.
Currently up 14 cents or 19.7% to 85 cents,mainly driven by the strong outlook.

[Left Field]

Outstanding result well received by the market.
Currently up 14 cents or 19.7% to 85 cents,mainly driven by the strong outlook.

Well done.... your average holding SP must be a figure of great beauty for the path ahead.

[ShiningStar]

Outstanding result well received by the market.
Currently up 14 cents or 19.7% to 85 cents,mainly driven by the strong outlook.

Think that means you are very "well positioned"

[ShiningStar]

Well done.... your average holding SP must be a figure of great beauty for the path ahead.

Did the research, backed himself and the rest is history! BOOM off to the Moon!