- We maintain Buy on DRB-Hicom Bhd, with a lower fair value of RM3.60/share – a 15% discount to our downward revised SOP value of RM4.25/share.

- Stemming from the announcement of its latest quarterly result recently, we had revised downwards our core net profit forecast for FY14F by ~29% to RM223mil (vs. FY13’s RM84mil).

- Proton Holdings is set to produce its hybrid model by year-end, according to news reports yesterday.

- MITI official was cited as saying that Proton has developed the prototype and has assured the ministry that it would be produced by year-end.

- The MITI deputy minister Datuk Hamim Samuri said in a parliamentary proceedings that the price and quantum of units to be produced have not been made known to the ministry.

- He added that the production of the hybrid model is in line with the country’s aim to produce some 6mil hybrid and electric cars. The initial expectation was for the hybrid model to be launched only next year.

- Our channel checks reveal that Proton is possibly working on the hybrid and electric models based on the Exora and the Saga.

- Word on the ground is that of a 2.2L Exora-platform hybrid.

- Proton will be one of the first car manufacturers to benefit from the government’s revised NAP which incentivises the domestic production of energy-efficient vehicles (EEVs).

- Crucially too, DRB-Hicom’s 34% associate Honda Malaysia is eyeing to be the number one hybrid hub in Asia-Oceania by 2016.

- In the meantime, Proton is also slated to introduce its planned global small car – codenamed P2-30A – by the middle of this year.

- Its subsidiary Deftech is expected to start recognising earnings this year (impact in FY15F) from its RM7.55bil 8x8 wheeled Armoured-Vehicle (AV8) project.

- The first AV8s is tentatively scheduled to be rolled out by the middle of this year. We had initially anticipated contributions to start from the end of FY13.

Source: AmeSecurities