KUALA LUMPUR (Sept 2): Shares in DRB-Hicom Bhd surged as much as seven sen or 5.6% to its intra-morning high of RM1.32 today, after CIMB Research included the stock into its top picks list. 

At 2.31, the stock was traded up six sen or 4.8% at RM1.31 with 4.84 million shares traded, valuing it at RM2.53 billion. 

DRB-Hicom was one of the top gainers on the local exchange. It posted a wider net loss of RM169.3 million in the first quarter ended June 30, 2016 (1QFY17) as compared to a net loss of RM19.7 million a year ago, mainly dragged down by weak motor vehicle sales.

Revenue for the quarter was weaker at RM2.5 billion compared with RM2.95 billion in 1QFY15.

In a strategy note today, CIMB Research said it has added DRB-Hicom into its top picks list premised on the stock offered an attractive valuations and/or dividend yield as well as short-term catalysts.

During the second quarter of 2016, the firm said it has upgraded DRB-Hicom to Add from Hold premised on the potential turnaround in Proton Holdings Bhd (Proton) pending the entry of a new foreign partner. 

"We believe (this) is imminent as it is a condition set by the government in the recent soft loan handout," said CIMB Research analyst Ivy Ng in the strategy note. 

The research outfit expects the divestment would boost DRB-Hicom's future earnings.

"Its services businesses have shown positive profit trends, which is a boon to the group as it consolidates its business segments and gradually reduces the dependency on its automotive business," she added.