Proton; Hold; RM5.43
Price Target: RM5.50; PROH MK

Proton has unveiled its expected price tag of RM62k-RM75k for its upcoming P3-21A model which is scheduled to launch in April. The pricing is positioned between the Persona and Inspira model which cost about RM49k-RM59k and RM78k-RM91k respectively.

In 2011, Persona has sold 46,415 units while the Inspira, which was launched towards the end of the year, sold 9,840 units. We expect a portion of potential buyers who initially opt for the Persona and Inspira to shift their purchases to the P3-21A given the close range of pricing. Therefore, we are forecasting about 8k-10k units to be sold this year given the less favourable outlook for the industry and production might not match up with the demand. Based on ASP of RM68.5k, this will translate into sales contribution of RM548m-RM685m (5.3%-6.6%) of our FY13F's topline earnings of RM10.4bn.

We maintain our Hold rating for Proton with RM5.50 TP pegged at the offer price. The 42.7% stake acquisition by DRB-HICOM is expected to complete within 6 days from today; resulting in Proton being a 50.01%-owned subsidiary.