- We maintain Buy on DRB-HIcom Bhd, with a fair value of RM3.65/share – a 15% discount to our SOP value of RM4.31/share.

- DRB-Hicom yesterday said Proton has finalised the details of its collaboration with Japanese automotive giant Honda Motor Co.

- According to Starbiz, DRB-Hicom group MD and Proton executive chairman Tan Sri Mohd Khamil Jamil said the market could expect the first variant within a couple of months.

- Starbiz has reported that the collaboration between Proton and Honda would be using the Honda Accord chasis for the new product.

- It this materialises, this would appear to be a re-badging exercise, prior to the rollout of the Perdana replacement model next year, which would likely be a Proton-designed car using the Petronas engine.

- The finalisation of the Honda collaboration is positive for DRB-Hicom, and it would appear significant progress has been made on that front.

- Proton also confirmed that the Preve hatchback was planned for launch after the Hari Raya celebrations. Proton is also developing a global small car codenamed theP230A.

- The Preve was launched in Jakarta yesterday. Indonesia is the fourth overseas markets for the Preve, after Australia, Thailand and Brunei. The OTR price for the Preve is 285mil rupiah (RM89,000).

- Meanwhile, NST reported that Proton would unveil a 10% reduction in the prices of its existing models in Malaysia tomorrow, based on “value engineering.”

- This will have an impact on its margins, but we do not expect it to be significant. We believe this to be the right move in view of the lower prices being offered by nonnational marques.

- Starbiz also reported that Proton is still pushing ahead with its vendor rationalisation programme in a bid to reduce its cost by 30% in five years.

- We continue to believe that DRB-Hicom is making all the right moves to rejuvenate Proton’s fortune for the long term – from cost cutting to ensuring a pipeline of sellable products.

Source: AmeSecurities