KUALA LUMPUR: DRB-Hicom Bhd’s unit Proton targets to sell 500,000 cars per year by 2017/2018 under its five-year business plan, according to AmResearch.
The research house said on Thursday that the earnings would potentially be at RM1bil at the pre-tax level.
“We maintain Buy on DRB-Hicom, with an unchanged fair value of RM3.65 a share, which is a 15% discount to our sum-of-parts value of RM4.31 a share,” it said.
AmResearch said DRB-Hicom had on Wednesday hosted a group of analysts and fund managers for a tour of the Proton City in Tanjung Malim.
(i) Under a five-year business plan, which is in its first year of implementation, Proton is targeting to sell 500,000 cars/annum by 2017/2018, with earnings potentially at ~RM1bil at the pre-tax level.
(ii) Proton will only be relocating its Shah Alam facilities beyond the five-year period as existing could still meet production requirements over the next few years.
(iii) Proton, via its strategic collaboration with Honda, will start production of the Perdana replacement model for supply to the government by next month, with ~3,000 units to be produced initially.
(iv) The national carmaker, on its own and not via a JV as initially speculated, will start production of its “global small car” by next year.
(v) Proton is looking at developing a hybrid model in line with its efforts to promote the development of “alternative energy” vehicles.
(vi) Proton is re-entering the UK market by next month, after meeting the minimum standards requirements, and is targeting the same for the Middle East by the first quarter of 2014 (last quarter of FY14F.)
(vii) Its latest model, the Suprima S, is scheduled to be launched in Australia by the middle of this month, following its launch Indonesia recently. The next markets for the model include Thailand and Brunei.(viii) Apart from the potential sale of land at Tanjung Malim and other projects, Proton City has so far identified -- RM300mil worth of residential and commercial properties that would be launched within the next five years.
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