PETALING JAYA: DRB-Hicom Bhd
is expected to see stronger earnings momentum in the second half (2H26) of its financial year ending December 2026 (FY26), driven mainly by sustained growth at Proton Holdings Bhd and Bank Muamalat Malaysia Bhd, according to Hong Leong Investment Bank (HLIB) Research.
“We expect earnings momentum to sustain into 2H26, supported by the improving outlook for Proton,” HLIB Research said in a results review.
The research house maintained a “buy” recommendation on DRB-Hicom with an unchanged target price of RM1.40, based on a 15% discount to its sum-of-parts valuation of RM1.64. The target price implies a potential capital upside of 44.3% from the counter’s price of 97 sen, excluding an estimated dividend yield of 2.6%.
HLIB Research said DRB-Hicom’s core profit after tax and minority interest (Patmi) rose 34.2% year-on-year (y-o-y) to RM45.8mil in the second quarter ended June 30, 2026 (2Q26), lifting first-half core Patmi 47.6% y-o-y to RM89.7mil.
The first-half result was within HLIB Research’s expectations and broadly in line with consensus, accounting for 42.8% and 47.6% of their respective full-year forecasts. Proton remains the key earnings driver, with sales reaching 118,800 units in the first seven months of 2026, up 38.7% from a year earlier.
HLIB Research attributed the strong performance to demand for the Saga MC3 and eMAS electric and plug-in hybrid models.
“Proton will benefit from the updated national electric vehicle or EV policy for imported completely built-up or CBU models with minimum cost, insurance and freight value of RM200,000 and motor output of 180kW,” the research house said.
It added that Geely was planning to rebadge the Saga for the Philippines market, potentially widening Proton’s regional footprint, while a new Saga crossover could provide another boost to sales in FY27.
The automotive division’s reported profit before tax (PBT) rose 95.7% y-o-y to RM224.3mil in 2Q26, while six-month PBT increased 57.6% to RM432.1mil.
Meanwhile, DRB-Hicom’s aerospace business continued to benefit from the full consolidation of Spirit AeroSystems Malaysia or Spirit.MY, generating RM865mil in revenue in 1H26, a 163.4% increase y-o-y. Bank Muamalat also remained profitable, recording PBT of RM109.4mil in 1H26.
