DRB-Hicom

[winston]

not vested

DRBNCOM – Proton-led recovery

Anticipate a strong turnaround in FY21-22.

HLIB Research maintains a BUY rating with a SOP-derived fair value of RM2.52 (a 25% discount to SOP: RM3.35), supported by undemanding 9.3x FY21 PE (13% lower than peers) and 0.60x P/B (50% lower than peers) coupled with robust turnaround for FY21-22 core earnings from an estimated loss of RM88m in FY20.

We remain positive on DRB’s outlook as it continues to enjoy strong automotive sales growth, leveraging on SST exemptions, along with attractive models line-up from Proton, Honda and Mitsubishi.

DRB also has strong leverage on the strong growth momentum of Proton within the next few years. Moreover, various attractive embedded assets within DRB provide significant value accretion potential.

R1-R2-R3: 2.10-2.20-2.42
S1-S2: 1.96-1.88
Cut: 1.86

Source: HLIB

[winston]

not vested

May 27, 2022

1Q22: Impacted by supply chain disruptions

1Q21 results fell below expectations as the group slipped into losses due to
weaker-than-expected sales and profitability at Proton.

We see challenging near-term prospects for DRB due to prolonged supply
disruption and inflationary cost pressure amid rising interest rates.

Downgrade to Hold with a lower RM1.40 SOP-based TP.

source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 5BC98F2191

[winston]

not vested

March 24, 2022

HLIB keeps 'buy' call on DRB-Hicom, sees Proton driving growth

by Tan Siew Mung

HLIB; "buy" call on DRB-Hicom Bhd with an unchanged target price of RM2.30

Proton, Honda, Mitsubishi, Pos Malaysia

Source: theedgemarkets.com

https://www.theedgemarkets.com/node/613347

[winston]

not vested

May 27, 2022

Affected by supply chain issues

DRB reported core LATMI -RM13.3m for 1QFY22, below both HLIB’s expectation
and consensus, mainly dragged by supply chain issue s on Proton.

Despite the supply issue, we remain confidence of Proton’s outlook given its high backlog orders and attractive new model line-up in coming years.

DRB will also leverage onto the strong demand for Honda and Mitsubishi marques and the recovery of Bank Muamalat and CTRM. We maintain BUY with a lower TP: RM2.00
RM2.30), based on 25% discount to SOP: RM2.66.

Source: HLIB

https://www.hlib.hongleong.com.my/Publi ... &mode=view

[winston]

not vested

DRB-Hicom
Back in the black in 2Q22

1H22 results were in line with expectations as we expect a stronger 2H22F in view of a stronger sales delivery from Proton and narrowing losses at POSM.

However, we still see a challenging operating environment beyond 2H22F in view of rising inflation and an unfavourable forex environment. Maintain Hold. TP: RM 1.50

Source: CIMB

[winston]

not vested

Syed Mokhtar weighs options for DRB-Hicom

The businessman is in talks with potential advisers on options that could involve a buyout of the firm.

Syed Mokhtar owns 56% of the Bursa Malaysia-listed firm.

Should Syed Mokhtar decide to buy out DRB-Hicom, it would be the second of the businessman’s companies to recently delist from the local bourse. MMC Corp Bhd, a company involved in ports and logistics, power generation and engineering and construction, was taken private in 2021.

DRB-Hicom bought a controlling stake in domestic automaker Proton Holdings Bhd in 2012 from state-owned Khazanah Nasional Bhd.

It sold 49.9% of the firm in 2017 to China’s Zhejiang Geely Holding Group Co, a deal that also gave Geely a majority interest in iconic British sports car brand Lotus Cars.

Source: Bloomberg

https://www.thestar.com.my/business/bus ... -drb-hicom

[winston]

not vested

DRB-Hicom ends FY2022 on high note despite 4Q loss of RM100m

by Justin Lim

Net loss of RM100.06 million for the fourth quarter ended Dec 31, 2022 (4QFY2022), against a net profit of RM117.47 million a year ago.

Quarterly revenue increased 5.42% year-on-year (y-o-y) to RM4.35 billion, from RM4.12 billion previously.

Despite losses in the postal division and properties division, it achieved an annual net profit of RM187.71 million, against an annual loss of RM296.42 million for FY2021.

Annual revenue rose 25.32% to RM15.51 billion from RM12.38 billion, lifted by contributions from almost all its business segments, except for the postal division.

Source: theedgemarkets.com

https://www.theedgemarkets.com/node/656163

[winston]

vested

DRB-Hicom returns to the black in FY22

DRB-Hicom said three sectors led the sterling 25.3% revenue growth in FY2022, with the automotive sector leading the growth with an increase of RM2.89bil with revenue rising more than 35.2%.

For FY2022, DRB-Hicom said national carmaker Proton sold its highest number of units since 2013 with a rise of 23.3% year-on-year.

The aerospace and defence sector recorded an increase in revenue by RM254.46mil or 41%.

At the banking sector, DRB-Hicom said revenue growth for FY2022 was RM152.36mil or 13.7% better than the corresponding year.

Source: The Star

https://www.thestar.com.my/business/bus ... ck-in-fy22

[winston]

vested

Moderating growth prospects in FY23F

FY22 core NP beat our expectations by 21%, but broadly in line at 97% of consensus’ due to better-than-expected recovery at Proton and POSM.

However, we expect slower NP growth in FY23F due to expiry of SST holiday, competition in courier service and lack of new orders at DEFTech.

Downgrade from an Add to Hold with a higher RM1.76 SOP-based TP.

Source: CIMB

https://rfs.cgs-cimb.com/api/download?f ... 3ABE9A8668

[winston]

vested

HLIB maintains buy on DRB-Hicom on promising outlook

Kenanga: Persistent part shortages faced by DRB-Hicom have resulted in sub-optimal production levels for its Proton and Honda vehicles.

“Furthermore, costs remain elevated due to high-cost inventory, high freight cost and unfavourable foreign exchange”.

Source: Bernama

https://www.theedgemarkets.com/node/657647