DRB-Hicom’s latest MoUs to add value, provide platform
KUCHING: DRB-Hicom Bhd’s (DRB-Hicom) latest string of memorandums of understanding (MoUs) is expected to add value to the group and provides strategic platform to explore future development of Malaysia’s automotive industry.
In a filing on Bursa Malaysia, DRB-Hicom announced that indirect subsidiary of the company Perusahaan Otomobil Nasional Sdn Bhd (PONSB) had on January 7, 2020, entered into a MoU with China Automotive Technology and Research Centre Co Ltd (CATARC) to collaborate in the field of automotive testing, research and development (R&D) and to maximise resources of China and Malaysia’s automotive industry.
In a separate filing on the same day, DRB-Hicom also announced that another MoU with Malaysia Automotive, Robotics And IoT Institute (MARii) for the purpose of collaborating with each other on the development of academic programmes, courses
While no material details provided, we understand that this is for the development of the country’s automotive industry by making Malaysia the next-generation vehicle (NxGV) hub in the region.
PublicInvest Research
and On-the-Job Training (OJT), establishment of AutonoMoUs, Automated and Connected Vehicle ( AACV) Test Bed in Cyberjaya and a full-fledged National Automotive Testing Centre in Tanjung Malim.
“While no material details provided, we understand that this is for the development of the country’s automotive industry by making Malaysia the nextgeneration vehicle (NxGV) hub in the region,” the research arm of Public Investment Bank Bhd (PublicInvest Research) said.
“It has been reported that under the National Automotive Policy (NAP) 2019, expected to be revealed this year, Malaysia will come out with the full definition of NxGV by 2022.
“We are positive on this collaboration as it could add value to the group and provides strategic platform to explore future development of Malaysia’s automotive industry, perhaps translate to tangible gains in the long run.”
All in, PublicInvest Research made no changes to its forecast. As such, the research arm’s net profit forecast for the first nine months of 2019 (9M19F), 2020F and 2021F has remained at RM84.7 million, RM205.9 million and RM246 million, respectively.
However, PublicInvest Research upgraded its call on DRB-Hicom to ‘outperform’, given the upside of 18 per cent to the research arm’s unchanged target price of RM2.80 per share.