KUALA LUMPUR (June 1): DRB-Hicom Bhd rose 3.43% this morning after it reported a lower net loss of RM10.26 million for the fourth quarter ended March 31, 2018, compared with RM329.57 million a year earlier, mainly due to the recognition of a research and development grant and better financial performance of operating companies.
At 9.05am, DRB-Hicom gained 6 sen to RM1.81 with 1.07 million shares done.
For the full year, DRB-Hicom made a turnaround after three years of losses with a net profit of RM498.44 million. Full-year revenue rose 6.06% to RM12.79 billion compared with RM12.05 billion previously.
Meanwwhile, CIMB IB Research upgraded DRB-Hicom Bhd to “Add” at RM1.75 with a higher target price of RM2.70 (from RM2.21) and said DRB-Hicom posted narrower core net loss in FY3/18, driven by lower-than-expected loss recognition at Proton, following the entry of the new foreign strategic partner.
In a note today, the research house said the group reported core net profit of RM59 million in 4QFY18; a first in almost 18 months.
“It also proposed a final DPS of 3 sen/share in 4QFY18, ahead of our expectation.
“We upgrade the stock from Hold to Add as we reduce our RNAV discount from 30% to 20% in view of expected minimal interference in Proton’s turnaround plan.
“Narrowing losses by Proton, strengthening of the ringgit against the US dollar and higher net profit contribution from the services division as potential re-rating catalysts,” it said.