KUALA LUMPUR: PublicInvest Research is retaining its Outperform call on DRB-Hicom with a sum-of-parts based target price of RM1.39.
It said on Friday while the news of the cancellation of the proposed sale of a 90% equity interest in Corwin Holding Pte Ltd is a dampener, the financial impact is minimal to DRB-Hicom.
“We believe near-term key catalyst for DRB-Hicom will be the launching of three new models for Proton, being its new Proton Perdana, followed by Proton Persona and Saga (facelift models). DRB is now trading at an undemanding valuation of 0.26 times price-to-book value and three-year historical low,” it said.
Corwin owns a leasehold property which the eight-storey shopping mall building known as The Verge in Singapore.
“We did not factor in any incremental change to our valuation when the proposed sale was announced earlier, as we have already imputed Verge’s RNAV in our group’s valuation,” it said.
PublicInvest Research said the disposal price for 90%-stake is estimated to be S$285.3mil (RM842.3mil). DRB-Hicom had estimated that the gain arising from the proposed disposal would be RM427.47mil.
“We did not factor in the estimated gain in our earnings forecast,” it said.
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