KUALA LUMPUR (July 24): Shares in DRB-Hicom Bhd rose 2.40% in early trade this morning following a positive outlook and target price upgrade for the stock.

At 9.05am, DRB-Hicom gained 6 sen to RM2.56 for a market capitalisation of RM4.95 billion.

Hong Leong IB (HLIB) Research maintained its “Buy’ rating on DRB-Hicom Bhd at RM2.50 with a higher target price (TP) of RM4.15 (from RM3.03) and said its meeting with DRB has re-affirmed its positive view on DRB’s turnaround.

In a note today, the research house said Proton Holdings Bhd registered its first ever quarterly profit in 4QFY19 (since FY11) due to cost-cutting measures, improved operation efficiency, higher Proton sales and new X70 contributions.

HLIB Research said it expects stronger Proton’s contribution in upcoming quarters, given the continued strong Proton sales volume on the back of attractive new model line-ups.

“DRB’s 53.5% Pos Malaysia Bhd will be reporting improved bottomline in upcoming quarters (post disappointing 4QFY19, dragged by various one-offs) while potentially benefiting from MCMC’s review on stamp prices.

“Furthermore, DRB has large undeveloped landbanks with combined market value of RM6.5 billion (RM3.35/share).

“We reiterate our Buy recommendation with higher TP: RM4.15 (from RM3.03) based on 10% discount to SOP: RM4.61, following revision on our SOP valuation method,” it said.