KUALA LUMPUR (Aug 26): RHB Research Institute Sdn Bhd has maintained its “Buy’ rating on DRB-Hicom Bhd at RM2.95 with a higher target price of RM3.35 (from RM3.05) and said it deems 1QFY19 results met expectations as the group remained profitable.
In a note today, the research house said improvements in the automotive division from stronger Proton-derived revenues lifted DRB-Hicom’s earnings and offset a weaker performance of its other segments.
“We remain positive on DRB’s long term prospects. The introduction of the next Geely-based model could be a catalyst.
“We adjust our earnings forecasts to comply with the change in DRB’s financial year end from 31 Mar to 31 Dec. The current audited financial statements will be for a period of nine months.
“Changes to earnings on our new FY20F and FY21F are -7% and +6% respectively. A weak consumer sentiment could pose a downside risk to earnings,” it said.