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DONT MISS THIS COUNTER AS A SUPERB RALLY ANYTIME!
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DATE: 22 FEBRUARY 2018
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THE STOCK : DRBHCOM
DRB-HICOM BERHAD
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Current Price : RM2.61
Immediate Target : RM2.75 - RM2.78
This stock has been called by Kim's several times since 0.90 sen and second buycall at RM1.70
(Please refer to previous blog for record)
Target Price : 1st RM1.90 - TP done
2nd RM2.20 - TP done
3rd RM2.50 - TP done
4rd RM2.80
5th RM3.00
Warrant : DRB-C48 & C45
DONT MISS THIS KABOOM STOCK!!!
This stock in our radar and expect to move higher very soonest.
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PREVIOUS BLOG
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1. https://klse.i3investor.com/blogs/spartan/134343.jsp (Buy Call RM1.70)
2. https://klse.i3investor.com/blogs/spartan/137754.jsp (Buy Call RM1.80)
3. https://klse.i3investor.com/blogs/spartan/139162.jsp (Buy Call RM1.78)
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WHAT KIM SAY?
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"DRB is among my favourite stock since 0.90 cts. Has been played frequently before. Also keep follow their progress and updates. Some traders talking DRB is pure political stock (GLC). I put it aside for now ideas as GE-Rally counter. By forseeing, focusing anda awaiting next quater result will be release end of this month. I am predicting it will be "SUPERB QR" . By the way.. must remember (No one force you to buy stock.. It's your decision..) Good luck!"- Kim Spartan
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KIM'S IDEAS
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1. DRB financials would be buoyed by its reduced stake in Proton. Proceeds from disposals including that from Lotus group, as well as gains from improved supply chain efficiencies.
2. First Geely based model, the Boyue SUV, is not expected to be in the Malaysian market for another year.
3. Nonetheless, with the stock still trading at a hefty discount to book and RNAV considering its significant suite of valuable assets and profitable businesses. Believe DRB investment risk-reward ratio remains compelling.
4. Achieved non-recurring gained 2QFY18 aris from the recognition of the RM1.1 billion R&D grant as income, as well as some reversal of provisions.
5. Geely only completed the acquisition of the 49.9% Proton stake on Sept 29, DRB reduced share of Proton’s losses would only be reflected from 3QFY18.
6. Appointed CEO Li Chunrong, Proton is currently formulating a business plan to turn it around, leveraging on the global resources of the wider Geely group.
7. Being able to enjoy some interest savings from the repayment in inter-company loans by Proton and from the proceeds of the sale of Lotus.
8. Management is looking to monetise other non-core assets to pare down debt, which could include the sale of land in Johor that could bring in proceeds of over RM600mil.
9. Analysts reckon that the share price run could be confidence from investors that DRB-Hicom’s subsidiary, Proton Holdings Bhd, could finally turn around in 2018, now that Chinese strategic partner Zhejiang Geely Holding Group Co Ltd (Geely) is on board, and that the national carmaker could be in for a stellar year.
10. Chinese expertise, under newly-appointed chief executive officer Li Chunrong, Proton is currently formulating a business plan to turn it around, leveraging on the global resources of the wider Geely group.
11. Through Geely, Proton would be able to procure competitive products and technologies, advanced production techniques, manufacturing efficiencies and raise product quality.
12. Geely would develop Proton as a stand-alone brand and its right-hand drive manufacturing hub, offering it an expedited route into growing Asean markets.
13. Forseeing new buycall level for now at RM2.50 - RM2.55. Previous buycall level is RM1.70 - RM1.73 on the diversified conglomerate.
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SIGNAL KIM'S STOCKWATCH
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THE PROFILE
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DRB-HICOM Berhad (“DRB-HICOM” or the “Group”) is one of the nation’s largest and most diverse conglomerates. We are mainly involved in the Automotive, Services & Education and Property, Asset & Construction sector. The Group has recently seen a revitalisation of its businesses, through the creation of new revenue streams and the injection of new lines of businesses through the execution of strategic moves aimed at increasing growth and profitability.
Arising from a merger between Heavy Industries Corporation of Malaysia Berhad (HICOM) and Diversified Resources Berhad (DRB) in 2000, DRB-HICOM has been actively expanding its portfolio in creating end-to-end value chains for its key businesses. It has also embarked on a rationalisation strategy to dispose of non-core assets, thus implementing a leaner and more efficient developmental resources management plan.
The Group has more than 80 operating companies within its stable and a workforce of some 60,000 employees. With a diverse range of operations that are nevertheless interlinked to create synergy, DRB-HICOM has built a strong foundation with great potential for the future. We will strive to remain resolute in being one of the nation’s largest and most diversified conglomerates and stay resilient in facing future challenges.
The Group’s Automotive arm can be considered one of the most comprehensive automotive businesses in the country. We also own national icons such as PROTON Holdings Berhad (PROTON), Motosikal dan Enjin Nasional Sdn. Bhd. (MODENAS) as well as Composites Technology Research Malaysia Sdn. Bhd. (CTRM), which plays a vital role in the global supply chain of aviation parts.
Within its Services & Education sector, the Group holds government and local authority concessions through Pos Malaysia Berhad (Pos Malaysia), Alam Flora Sdn. Bhd. (Alam Flora) and Pusat Pemeriksaan Kenderaan Berkomputer Sdn. Bhd. (PUSPAKOM). We expanded into the education sector through DRB-HICOM University of Automotive Malaysia (DRB-HICOM U), which was elevated to a full-fledged university status just 5 years after its initial inception as International College of Automotive (ICAM).
In the Property, Asset & Construction sector, we are the developers of the prestigious Glenmarie brand, which is synonymous with luxury and quality in residential, industrial, commercial and hospitality projects nationwide. In addition to that we have also developed Proton City, a township with industrial, commercial and residential activities spread over 4000 acres.
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THE KEYNOTE
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DRBHCOM - The local automotive industry needs to proactively look at the strategic partnership between DRB-Hicom Bhdand China’s Geely Holding Group Co Ltd Ain the ownership of Proton Holdings Bhd to revive exports of national cars, Deputy Prime Minister Datuk Seri Dr Ahmad Zahid Hamidi said. He said major automotive players in the country should learn how China’s automotive industry grew rapidly to become one of the top five global carmakers besides Japan, South Korea, India and the United States.
DRBHCOM - DRB-Hicom Bhd rose 2.27% in active trade after Hong Leong IB Research said the recent conclusion of FSP agreement with Geely as Proton Holding Bhd’s new strategic partner (and disposal of Lotus) coupled with the appointment of Li Chunrong as Proton’s new CEO (a veteran in the automotive industry with 30 years of experience working with major international brands), marked a significant milestone for DRBHCOM for its earnings turnaround. The research house said that moreover, the successful injection of KLAS into Pos Malaysia Bhd (POS) has seen DRB-Hicom Bhd consolidating POS positive earnings
DRBHCOM - The Minority Shareholder Watchdog Group (MSWG) is hoping that the government will finally end extending financial assistance to ailing national carmaker Proton Holdings Bhd. MSWG said this follows the change in Proton's ownership, with the carmaker now under full commercial control of two private entities: DRB-Hicom Bhd and China-based Zhejiang Geely Holding Group Co Ltd.
DRBHCOM - Tie-up with India’s BAL another step in regaining lost ground. Collaborations are the way of the future. Manufacturers are increasingly going into partnerships to share resources and enter new markets to expand their reach. And after being in the doldrums for some years, Motosikal Dan Enjin Nasional Sdn Bhd (Modenas), a unit of DRB-Hicom Bhd, has also opted to work with others as it revs up for a second ride.
DRBHCOM - The significant management changes by Proton is a turning point in the national car manufacturer’s long-term quest to emerge as a successful international brand. Dr Li Chunrong, who takes over as chief executive officer (CEO) of Proton Holdings Bhd’s manufacturing arm, comes armed with global automotive credentials that make him to be the best man for the job to turn around Proton and penetrate ASEAN in a big way.
DRBHCOM - Will allow Govco to register private caveats on all the landed properties in the asset pool and will further ensure that there will be no encumbrance in transferring the asset pool to Govco in the event of an asset exchange.
DRBHCOM - Proton Holdings Bhd's manufacturing unit has received its research and development (R&D) reimbursement grant of RM1.1bil, which is the latest positive news for the loss-making national car maker. DRB-Hicom said Perusahaan Otomobil Nasional Sdn Bhd (PONSB) had received the reimbursement grant for the R&D activities in line with the government's policies.
DRBHCOM - Proton Holdings Bhd targets to be profitable by 2020 following its tie-up with Zhejiang Geely Holding Group and there are plans for the latter to introduce its Euro 6 engines.
DRBHCOM - Has completed its proposed divestment of 547 million shares or 49.9% stake in Proton Holdings Bhd to Zhejiang Geely Group Holding Co for a sum of RM460.3mil.
DRBHCOM - DRB-Hicom Bhd and Zhejiang Geely Holding Group Co Ltd confirmed today that Dr Li Chunrong will be the new CEO of Perusahaan Otomobil Nasional Sdn Bhd (PONSB).
DRBHCOM - National carmaker may be profitable in 3 to 5 years. Li Chunrong, the newly appointed chief executive officer (CEO) of Proton manufacturing arm Perusahaan Otomobil Nasional Sdn Bhd (PONSB), will unveil a transformative plan encompassing eight topics to improve the operations of the company. Among the eight topics are product planning, modification, procurement and quality improvement, with a core focus on customer satisfaction.
DRBHCOM - India’s Bajaj Auto Ltd (BAL), the world’s third largest motorcycle manufacturer, is keen to make Malaysia its manufacturing base as they seek to make inroads into the Asean market.
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THE FINANCIAL
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