DRB-Hicom climbs on positive sentiments over Proton turnaround, possible new govt job

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KUALA LUMPUR (April 16): Shares of DRB-Hicom Bhd rose as much as 3.9% today, buoyed by continued positive sentiment on the turnaround of its biggest loss-maker, the 50.1%-owned subsidiary Proton Holdings Bhd.

DRB-Hicom is also said to be a front runner, alongside Sime Darby Bhd, to get a government fleet contract, according to an article by The Edge Malaysia weekly published for the week of April 15-21. The two companies are bidding for the 15-year concession to supply, repair, maintain and manage the government's fleet of vehicles.

At 4.31pm, DRB-Hicom, which was up 8 sen earlier, has pared some of its gains to trade at RM2.11, still 5 sen or 2.4% higher than the stock's closing yesterday, after some 2.13 million shares changed hands.

At its current price, the group has a market capitalisation of RM4.06 billion.

A source familiar with the tender told The Edge weekly that the request for proposal for the contract closed on Feb 28 and the government is currently evaluating the submissions.

Meanwhile, since the launch of Proton's sport utility vehicle (SUV) X70 on Dec 12 last year, DRB-Hicom's share price has gained 13.8% to its six-month high of RM2.15 last Friday.

Within the first 100 days after the launch of the X70, Proton announced that it has already sold and delivered 8,500 units. In a statement in March, Proton said it was one of the top three car brands in Malaysia ranked by volume in the first two months of the year.

According to official registration figures, the X70 was the most popular car in the Malaysian car market's SUV segment during January and February and is forecast to maintain the title for the third straight month in March.