Proton to maintain growth momentum into FY23
LUMPUR: CGS-CIMB Securities Sdn Bhd remains positive on DRB-Hicom’s outlook as it expects Proton Holdings Bhd to maintain its growth momentum into financial year 2023 (FY23), driven by its healthy order backlog.
In a note, the research firm said the potential launch of new sports utility vehicle (SUV) and all-electric vehicles (Smart) models in 2023, as well as higher contributions from export markets, would also drive Proton’s positive growth momentum.
DRB-Hicom Bhd returned to the black in the third quarter ended Sept 30, 2022 (3Q22), chalking up a net profit of RM143.95 million against a net loss of RM179.44 million in 3Q21, mainly attributed to the higher sales from Proton.
“The automotive segment remains the key driver for the group, on the back of 55 per cent year-on-year (y-o-y) revenue growth in the first nine months ended September 30, 2022, driven by higher contribution from Proton.
“Proton’s sales volume jumped 40 per cent y-o-y due to base effects (negative impact of the Covid-19 lockdowns in JuneAugust 2021 on sales) and the extension of the grace period to March 31, 2023, to register cars booked before June 30, 2022 (the cut-off date for the sales and services tax holiday),” said CGSCIMB.
As such, it has raised its forecast earnings per share on DRB Hicom for financial years 2022-2024 (FY22-FY24) by 64-127 per cent to account for higher contributions from the company’s auto and banking segments.
“We like DRB-Hicom as a proxy for Proton’s resurgence and the overnight policy rate hike theme.
“Hence, we upgrade the stock to an ‘add’ call from ‘hold’, with a higher target price of RM1.75,” it said. — Bernama