KUALA LUMPUR (March 29): Hong Leong IB Research institutional research has maintained its "BUY" rating on DRB-Hicom Bhd with RM2.00 target price (+45% upside), based on 20% discount to SOP.

In a trading stocks idea note today, the research house said that at RM1.38, DRB-Hicom is trading at undemanding valuation at 0.42x P/B, which is 26% lower than its 10-year historical average of 0.57x.

"Despite recent selling pressures, DRB-Hicom has maintained a strong support above the 50-SMA near RM1.31 amid undemanding valuation and imminent Proton FSP announcement by June.

"On the back of bullish hourly chart and bottoming up daily indicators, share prices are likely to test immediate resistances at RM1.43 (daily upper Bollinger band) and YTD high at RM1.46 soon. A decisive break above RM1.46 could potentially signal that the next leg up towards 52-week high at RM1.55.

"Key supports are RM1.34 and RM1.31. Cut loss at RM1.30," it said.