KUALA LUMPUR, Aug 18 ― Public Investment Bank expects DRB-Hicom Bhd to deliver better performances in the coming quarters due to the gradual reopening of economic sectors as set out in the National Recovery Plan.
In a research note today, it said DRB-Hicom reported a headline net loss of RM217.4 million in the second quarter (Q2) of 2021, as the conglomerate was impacted by prolonged movement restrictions which resulted in business shutdowns since mid-May.
“With the recent easing of movement restrictions, where another 11 businesses have been allowed to re-open and in which, automotive sales and distribution showrooms are a part of, we expect vehicle sales to recover strongly in the months ahead due to pent-up demand.
“We remain affirmed of its growth prospects going into 2022 and retain our ‘Outperform’ call on DRB-Hicom with an unchanged target price of RM2,” it said.
While it leaves estimates unchanged, Public Investment cautioned on the possibility that the growth prospects may be missed given ongoing uncertainties.
Meanwhile, CGS-CIMB is optimistic for a stronger second half for DRB-Hicom’s Proton and other marques within the company following the government’s decision to allow automotive assembly plants and showrooms to reopen from August 16 onwards, subject to strict standard operating procedures and employee vaccination rate.
“Over 85 per cent of Proton’s workforce is fully vaccinated as of early-August.
“To recap, Proton received over 40,000 bookings for its X50 SUV as of early Q1, but it only managed to deliver 16,000 units prior to the Full Movement Control Order (FMCO),” it said in a separate note.
Proton also launched the new Persona and Iriz facelift models earlier this month, following the launch of the X70 SE in July, said CGS-CIMB.
“Thus, we expect the X50 order backlog and new launches to drive Proton’s sales volume recovery in the second half of this year,” it said.
The research firm, however, revised Proton’s 2021 sales forecast to 110,000 from 130,000 units, due to delays in the reopening of the automotive sector, which is in line with the Malaysian Automotive Association’s total industry volume revision to 500,000 from 570,000. ― Bernama
