Thursday 28 Mar 2024
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KUALA LUMPUR (Sept 30): French automobile manufacturer Groupe PSA SA’s confirmed participation in Proton Holdings Sdn Bhd’s strategic partnership bid is positive, as it indicates good value proposition in Proton, according to CIMB IB Research.

CIMB IB analyst Mohd Shanaz Noor Azam said the possibility of a new partner could revive DRB-Hicom Bhd’s Proton earnings.

“We are positive on this news as the new partner is expected to help turnaround Proton’s losses. We keep our “Add” call and sum-of-parts (SOP)-based target price of RM1.69 (10% discount to revalued net asset valuation).

“Potential re-rating catalysts are the emergence of a strategic partner for Proton and better performance from its services division.

“Key downside risks are no foreign strategic partner for Proton and higher losses at Proton,” he said in a note today.

Two days ago, Bloomberg reported that Proton has shortlisted five candidates as its potential strategic partner, comprising PSA, Volkswagen AG’s Skoda Auto a.s, Suzuki Motor Corp, Renault SA and Zhejiang Geely Holding Group Co Ltd.

Proton expects to select a partner before first half of 2017, a condition it needs to fulfill in order to receive a RM1.5 billion soft loan from the government.

At 10.51 a.m., DRB-Hicom dipped one sen or 0.68% to RM1.47, with 738,500 shares done, for a market capitalisation of RM2.86 billion.

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