KUALA LUMPUR, Jan 18 ― The share price of DRB-Hicom Bhd on Bursa Malaysia ended the morning session 10 sen lower at RM1.69, pressured by a lawsuit faced by Proton Automobiles (China) Ltd and Perusahaan Otomobile Nasional Sdn Bhd.
A total of 6.06 million shares were traded at noon break.
China’s Goldstar Heavy Industrial Co Ltd had filed a 860.61 million yuan legal claim relating to the termination of the equity joint-venture contract between Proton Holdings Bhd (Proton), Lotus Group International Ltd and Goldstar on Jan 22, 2018.
In a filing with Bursa Malaysia on Thursday, DRB-Hicom said it was reviewing the claim and would take all necessary steps to defend against the claim and ensure its rights were protected.
PublicInvest Research said a failure to defend against the litigation would result in the group facing material financial impact.
“We are keeping our forecast at this juncture, pending further clarity, although we would also like to highlight this potentially significant financial risk.
“We maintain our ‘outperform’ call on DRB but with a lower target price of RM2.10 as we raise our discount factor to account for these current uncertainties,” it said in a research note today.
The research house added it was still positive of the group’s longer-term prospects, premised on its Proton-led turnaround. ― Bernama
