DRB-Hicom

DRB-Hicom

Postby winston » Mon Aug 08, 2016 1:42 pm

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Crystallising asset value

DRB’s disposal of The Verge and KLAS will help unlock the value of its assets.

In our view, Proton’s potential foreign partnership will provide new capital injection for R&D and working capital.

We expect the three new model launches to drive Proton’s volume growth in 2H16 and beyond.

We upgrade DRB from Hold to Add with a higher TP of RM1.60 based on RNAV.

Key catalysts are new foreign partner for Proton and completion of Verge disposal.

Source: CIMB

https://brokingrfs.cimb.com/d05pwgTY2no ... jcsyQ2.pdf
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Re: DRB-Hicom

Postby winston » Tue Feb 07, 2017 5:54 pm

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Malaysia's DRB-Hicom awaits foreign bids for Proton partnership

KUALA LUMPUR, Feb 7 (Reuters) - Malaysian conglomerate DRB-Hicom Bhd <DRBM.KL> on Tuesday said it is waiting for
prospective foreign carmakers to submit bids for a strategic partnership with its Proton Holdings Bhd unit.

"DRB-Hicom is now waiting for the submission of bids from the parties, after which an earnest evaluation of the bids will commence," the company, which wholly-owns national carmaker Proton, said in a statement.

Without naming the bidders, DRB-Hicom said "the parties have conducted their own due diligence on Proton over the past weeks".

DRB-Hicom said it maintains its target of completing the selection of the foreign strategic partner by the first half of this year, although it will aim to complete the deal earlier.

The company also reiterated that it will continue to hold a substantial stake in the struggling carmaker.

"We have stated before that we will maintain a significant equity in Proton, and this has not changed," the statement read.

DRB-Hicom's share price has risen about 10 percent since Thursday last week when local media reported that Chinese car
manufacturer Geely was the frontrunner for the partnership.

In September, DRB-Hicom said it was looking at five proposals from foreign bidders but declined to name them.

Reuters reported earlier that Peugeot maker PSA <PEUP.PA>, Japan'sSuzuki Motor Corp <7269.T> and French carmaker Renault
SA <RENA.PA> have signalled interest in the partnership.[nL3N1BZ1R7]

In April last year, the Malaysian government gave Proton 1.5 billion ringgit ($338.18 million) in financial aid on the condition that it implement a turnaround plan and seek a foreign partner to assist in research and development.

Source: Reuters

http://www.nasdaq.com/article/malaysias ... z4XzXaDrfP
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Re: DRB-Hicom

Postby winston » Mon Feb 13, 2017 3:11 pm

Proton an 'attractive acquisition target'

By Wong Ee Lin

KUALA LUMPUR (Feb 13): Proton Holdings Bhd's losses and RM7.93 billion worth of tax credits make the car manufacturer an attractive acquisition target. This is in anticipation that the company will be able to go on a long tax holiday when it starts reporting profits.

The Edge Malaysia business and investment weekly (Edge Weekly) reported this in its Feb 13–19 issue. Edge Weekly quoted Malaysia's national car manufacturer Proton's latest financial statement for financial year ended March 31, 2016 (FY16).

Edge Weekly reported: "The billions in losses accrued by Proton Holdings Bhd over the years have pushed the company to the brink of insolvency. But the massive losses are also making Proton an attractive acquisition target for foreign strategic partners (FSP) like China's Geely Automobile Holdings Bhd and France's PSA Group."

"A closer look at Proton's latest financial statement reveals that the company was sitting on RM7.93 billion in unrecognised deferred tax assets in FY2016 ended March 31. Today, this sum should easily exceed RM8 billion as Proton continues to bleed red ink," Edge Weekly reported.

DRB-Hicom Bhd wholly owns Proton, which posted a net loss of RM1.46 billion in FY16.

Today, CIMB Investment Bank Bhd analyst Mohd Shanaz Noor Azam wrote in a note that finding the right FSP would be crucial for Proton's rejuvenation.

"We believe that finding the right FSP for Proton is still DRB-Hicom's main priority, as it seeks to move forward with Proton's recovery plan.

"We maintain our Add call on DRB-Hicom with an unchanged SOP (sum-of-parts)-based target price of RM1.69 (10% discount to RNAV (revised net asset value)).

Our Add call is supported by the imminent FSP for Proton and better performance in DRB-Hicom's services division. Key downside risks are lack of FSP for Proton and further deterioration in Proton's earnings," Mohd Shanaz said.

Source: The Edge

http://www.theedgemarkets.com/my/articl ... ion-target
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Re: DRB-Hicom

Postby winston » Tue Feb 14, 2017 10:12 am

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Attractive tax credit allowance for Proton FSP

The Edge Weekly highlighted DRB’s 100%-subsidiary Proton as an attractive acquisition target, given that it has unrecognised deferred tax assets of RM7.9bn.

The DTA are long-term positive for DRB and Proton’s foreign strategic partner (FSP), as they would have to turn around Proton in order to utilise the tax credits.

Proton FSP is a key re-rating catalyst for DRB as it would alleviate Proton’s losses.

Maintain Add

Source: CIMB

https://brokingrfs.cimb.com/EK3-eYNv0p4 ... h1e0A2.pdf
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Re: DRB-Hicom

Postby winston » Sun Jan 14, 2018 9:52 am

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Dec 1, 2017

Shifting into high gear

DRB-Hicom posted a wider core net loss in 1HFY3/18 due to higher-than-expected opex and tax expense; the results fell short of both our and consensus expectations.

However, we expect narrowing losses in 2HFY18F due to lower loss recognition at Proton following the completion of a 49.9% share subscription by Geely in Sep 17.

We cut earnings to reflect margin compression from higher opex and tax expense.

We see logistics division as the key growth driver for the group, riding on expansion of
regional logistics hub in DFTZ and key collaborations with major e-commerce players.

Maintain Add with an unchanged RM2.35 SOP-based target price.

Maintain Add and RM2.35 target price

We maintain an Add on the stock with an unchanged SOP-based target price of RM2.35.

Narrowing losses by Proton, strengthening of the ringgit against US$ and higher-than-expected
profit contribution from the services division are potential re-rating catalysts.

Meanwhile, key downside risks to our call are widening losses at Proton and weaker
contribution from the services division.


Source: CIMB

https://brokingrfs.cimb.com/kJB96rE_wA3 ... UBSQQ2.pdf
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Re: DRB-Hicom

Postby winston » Sat Feb 10, 2018 9:18 am

Is DRB-Hicom undervalued?

Shares of DRB-Hicom had risen by almost 50% in less than two months to a high of RM2.73.

Despite the surge, DRB-Hicom still trades below its net asset value per share of RM3.54.

At the current share price of RM2.55 apiece, DRB-Hicom’s share price is currently trading at an undemanding 8.34 times price to earnings ratio (PE).


Source: The Star

https://www.thestar.com.my/business/bus ... dervalued/
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Re: DRB-Hicom

Postby winston » Tue Mar 13, 2018 2:32 pm

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DRB-HICOM

Buy
Target price: RM2.76

DRB-Hicom announced the proposed disposal of its non-industrial property assets and its entire hospitality portfolio, to Prisma Dimensi and Kelana Ventures Sdn Bhd.

RHB Research noted that the total market value of assets to be disposed totalled RM2bil, compared with the sale consideration of RM1.93bil to be satisfied via 1,243.4 acres of freehold land in Tebrau, Johor Baru and cash of RM288.7mil.

“The RM1.65mil price for the Tebrau land translates to approximately RM30 per sq ft, which we believe is fair.

“The cash proceeds would be used mainly for scheduled repayment for DRB-Hicom’s Islamic medium term notes and expenses relating to the proposed disposals,” it said.

The research house said the proposed acquisition of the Tebrau land marked a change in strategic direction for DRB-Hicom’s property division, which would now focus on the development and sale of industrial properties.

“It has an additional 600 acres of landbank to be developed as industrial parks.

“This landbank is located in Tanjung Malim, Perak; Shah Alam, Selangor; Bukit Kayu Hitam, Kedah; and Alor Gajah, Melaka,” said the research house.

RHB Research pointed out further that its landbank in Johor is situated within the development region of Iskandar Malaysia –close to major townships and served by various highways.

“DRB-Hicom intends to develop the Johor land into a modern industrial zone park comprising terrace factories, semi-detached factories and purpose-built detached factories components.

“This would be together with commercial development, worker hostel complex and community facilities, with an estimated gross development value of RM4.2bil.

“The said proposed development is expected to commence in 2020 over ten years, although these plans are subject to change, given the soft Johor property market,” the research house said.

Source: RHB Research Institute
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Re: DRB-Hicom

Postby winston » Fri May 31, 2019 9:25 am

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Trading Buy: DRBHCOM - 1619
(Last price: RM1.98, Potential upside +15.7%)

Company Profile
DRB develops, assembles, and sells motor vehicles and military vehicles. It also operates banking, property development and construction work as well as provides logistic, airline catering and ground handling services


Trading Catalyst

We expect DRB to continue report earnings improvement, where recovering trend was observed in its 2HFY19 results, leveraging on Proton’s turnaround momentum following the participation of Geely as Proton’s Foreign Strategic Partner.

Following X70 launch, Proton has been reporting strong sales growth and the positive momentum is likely to continue ahead of the exciting models lined up in 2019-2020.

Moreover, Proton’s new plant commencement by Sep 2019 will allow it to manufacture “next Generation” Proton models and further improving its cost structure.

Technically, the stock is poised for a downtrend resistance breakout soon, to lift prices towards RM2.09-2.29 in the short to mid-term.

Technical View
Resistance: RM2.09 / RM2.19 / RM2.29
Support: RM1.92 / RM1.88
Cut loss: RM1.84

Key Financial Stats
Trading at 6.6x FY20E P/E, supported by a robust 65% FY19-21 EPS CAGR

Source: HLIB
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Re: DRB-Hicom

Postby winston » Thu Jul 16, 2020 9:07 am

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HLIB Research remains upbeat on various attractive embedded assets within DRBHCOM (Buy–RM2.52), despite anticipating another weak 2QFY20 results in August.

Overall, Proton has registered a successful turnaround to RM169.4m in FY12/19 (since FY11) post restructuring exercises and new models introductions, and on track with its long term 10-year business plan.

Management expects the overall automotive segment to rebound in 2HFY20 following introduction of SST exemptions and launching of several attractive models.

However, Deftech, CTRM and Bank Muamalat are expected to remain subdued in the near term, affected by Covid-19.

Technically, the stock is poised for a potential flag breakout near RM1.83 in the short term.

A successful breakthrough will lift prices higher towards RM2.00-2.10 territory.

Key supports are near RM1.65-1.70. Cut loss at RM1.66.

Source: HLIB
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Re: DRB-Hicom

Postby winston » Thu Sep 10, 2020 8:54 am

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HLIB Research reiterates a BUY rating on DRBHCOM (TP: RM2.52, based on 25% discount to SOP RM 3.35).

We remain positive on the stock as it continues to enjoy strong automotive sales growth, leveraging on SST exemptions, along with attractive model line-up from Proton, Honda and Mitsubishi.

Technically, ongoing rally from RM0.98 (Covid-19 bottom in March) remains intact unless share prices close below RM2.00 (30D SMA) again.

Further upside resistances are situated at RM2.26-2.43-2.58 zones whilst supports fall on RM2.00-1.91. Cut loss at RM1.89.

Source: HLIB
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