Muda Fadli, my long-term target price is RM0.20. See my comment on 19/2/2016. Kalau hit 0.17, which is the NTA, I also very happy. Good return. Buy, keep and wait. Big boss also buying at 0.105, kalau big boss confident, kita pun kena confident.

Had lunch with a friend who works with Toyota. He said February sales was very bad. He heard that Proton sales for February was about 6k units. Toyota was at number 4, behind P2, P1 & H.

This is not good for DRB. Operating losses (excluding profit on sale of assets) will be much more in the next quarter report that will be out in May.

Patience. Good things come to those who wait.

January new vehicle sales report, per MAA, showed total industry volume declining from 69,401 vehicles in Dec 2015 to 44,591 vehicles in January. A massive 35.75% drop. Comparing to January 2015, vehicle sales drop by 11.88% from 50,602 vehicles in January 2015.

This shows the economy is not doing very well. Automotive sales normally one of the first to be hit in a slowing economy and the last to recover.

For DRB loss making subsidiary, Proton, sales drop slightly to 7,743 vehicles. This would indicate things haven't turn around and is running at a bigger loss. You can add the 50 units sold to Chile to this and sales still lower. I feel that sales to Chile probably selling at a loss to gain entry and has a higher cost associated to produce very low volume of Left Hand Drive vehicles.

For DRB to turn around, the automotive industry needs to turn around. As of now, have not turn around yet. I don't recommend to buy yet.

Please make your own judgement.

Same here, picked up a bit more this morning. Quarter result should be out today, I do not expect it to be very good, given the economy. Hopefully also announce sale of Takaful to boost share price.

Only concern is Mr. Lim Chee Khoon keep selling.

Good results. Excellent dividends. Just went in today.

I personally would rather see operating profit than profit from disposal of assets.

As for Perdana, went to a show room. Price RM150,000.00 for the 2.4. Salesman said 2.0 not launching yet. At 150k, I would rather buy a CX-5 at 140k. Additionally, would you buy a 'first batch' from Proton?

Things might pick up, but not by next quarter report. So I will wait and see how sales do in April before going in. Jan, Feb & March confirm bad. I might miss the boat, but rather buy when stock have better chance in going up.

Analyst get their figures from DRB. DRB projections surely paint a beautiful figure, otherwise, all the big bosses will have no job.

Always do your own analysis and look at the facts. For me, looking at Auto sales in January and anticipated auto sales in February, we have not reach a bottom. Like I said, next quarter results will probably be worst.

Maybe we are close to the bottom, but if can buy 10 or 20 or 30% lower, why buy now?

And if you buy today @ RM0.975, can goes to 1.22 per UOB, can make 25% in a few weeks. If goes to RM2.00 with sales of Takaful, can make 105% return in a few weeks!

Hope is always there, for now, stock price is negative, so I will stay on the sidelines. I will keep watching and if things turn around, than can go in. I had mentioned this earlier.

There are a few goods things happening, like POS Malaysia, IPO of Bank Muamalat, Deftech, Proton land bank, new models, tie up with Suzuki etc. but the main issue now is Proton and the automotive sector. This is a major sector for DRB. This sector needs to turn around for the stock price to recover.

The other major issue is the financing cost, with losses, any new refinancing of bonds/sukuk or any type of new syndicated loans, rates will be higher. MARC has recently down graded DRB to negative.

Also, I think management is not forward thinking. Why invest RM600 million is new petrol based engines when the market is moving towards EEVs? They should jump the technology gap and went straight for electric/hybrid technology. This RM600 million is kept in the books under asset and with other product development cost that has been capitalized. I am sure many other product development cost is sitting in the books under assets, so the final NTA of RM3.80 has to be discounted for this and is probably is much lower.

Another issue with NTA, if financing cost goes up, DRB might have to sell assets to finance operations, if this happens, NTA will start dropping.

With heavy losses, dividend yield that were attractive will be old story. If EPF and others start selling again, a price drop of 20% from here is possible.

In short, for the price to turn around, automotive sector needs to turn around. The NTA of RM3.80 has to be discounted for development cost capitalized under asset. Here, the NTA is not a good benchmark for this stock.

I am not an expert, just sharing my thoughts. I could be wrong.

5c0160, About limit down tomorrow.....not sure if it will be that bad.

This was expected, see my previous comments, primarily my comments on Proton.

Next quarter results will be even worst:
In January 2016, automotive sales for Proton and Honda drop significantly and February has always been the slowest month in the year and results will be even worst. Given the current economic slow down, tighter bank lending etc, March won't be able to improve the situation and might be even worst.

Sometimes I wonder, is Dr. M is attacking PM because PM don't want to give subsidy of a couple of billions Proton has been asking for. Now surely wont give, son also removed....how to reconcile.

Agreed. 0.965 is now the new support. Believe it will cross RM1.00 in a matter of a weeks.

http://www.theedgemarkets.com/my/article/marc-revises-drb-hicom%E2%80%99s-outlook-negative-proton-grapples-competition-poor-sentiment

Fantastic.....confirms only need MOF rubber stamp.....should be within the next 60 days!!! Buy, buy, buy!!!

Did a simple calculation, using P/E, to predict future pricing.

Assume that now company is profitable and will be able to maintain the current quarter EPS of RM0.005 per quarter or RM0.02 for the next 12 months.

Looing back to 2009 & 2010, when company was profitable, the average P/E ratio is about 10.

With this, can predict the future target price will be RM0.20 per share.....double from yesterday's closing price. This stock is now a trading buy.

Additionally, back in 2009 & 2010, dividends payout was RM0.003 per share or 3% yield from yesterdays close.

Good luck all....this is a stock to buy and keep for a while.

Would now be difficult to pick up below RM0.94. Supported by company buy back. Looking at the charts, there should be a triangle breakout any time now.

JamesOoi - Excellent analysis. Thank you.

0.94 is now the new support....Will very soon set a new 52 week high and pass RM1.00, hopefully, before end of this month.

Given the economic situation, I am guessing the quarterly results won't be that good. I am hoping for the announcement of the sale of their Takaful subsidiary to Zurich at a reasonably good price of a few hundred million...Hehehe

Yep, strong support at 0.90/0.905. Picked up a some more today. Will soon test 0.945 / 0.95 again.

Many sellers today.....correction or something to worry about?

Agreed with you, Markus......Best yet to come!!!!

I believe the agreement is already done between MAA and Zurich regarding sale of MAA Takaful licences. Both have agreed on the pricing. We are just waiting for BNM & MOF to rubber stamp their approval in order to disclose the transacted price.

See below from PublicInvest headline dated 1st Dec.

MAA: Submits application to BNM to sell takaful operation. MAA Group, Solidarity Group Holdings BSC and Zurich Insurance Co Ltd (Zurich) has jointly submitted an application to Bank Negara Malaysia for the sale of MAA Takaful stakes today. (Financial Daily)

Yes, the minimum would be 2 times book value, since BNM is no longer issuing new licences and wants a consolidation of the industry, I believe the multiple of 2 times book value would be the absolute minimum.

Wow!!! The charts all look so beautiful....Looks like going to fly!!!!

I too am long on MAA. Started collecting at 0.67 and even today collected a bit more. When the news out, than buy on the first day news out, using my margin account, and sell by T3. Hehehe

If Takaful licence is worth RM600 million, that would be fantastic!!! Did you register at the blog? If so appreciate if you could copy and paste the article here.

No news, was just wondering. So when the news is out, will know how far can go and can go in some more.....hopefully do a few contra trade.

I am sure the figure will be much more than RM100 million.....just using RM100M as a guide, easy to multiply.

Thank you.

Will be seeing higher construction cost with the increase in levy for foreign workers. Margins will be further reduced.

Zurich is buying MAA Takaful biz. For every RM100 million that Zurich pays for MAA Takaful, how will it effect the Share Price? Appreciate your thoughts.

Thank you in advance.

Gap up this morning with 1 buyer at RM0.90 for 250k shares. Guess some sellers decided to exit/take profit in these uncertain times. I am have been accumulating below RM0.90 at smaller volume. :)

Hi Ivan9511,

I have never used Par Value for stock valuation. For Bonds, Par Value is important.

Is DRB share cheap? Looking at the P/E ratio for the trailing twelve month, stock is expensive with P/E of 23.38. To me, anything more than 12 is expensive.

What will next reported results look like in Feb? Results won't look good. Again, Proton is a drag on the entire group. Last quarter till 31st Dec, Proton losses in the hundreds of million; I estimate at about RM300 million, based on the number of cars sold.

Will they pay dividend? Yes, from the sale of Corwin. It is not good when company has to sell good assets pay dividends.

Anything good? Yes, POS Malaysia & Defence contract. Is it enough? I don't think so.

http://www.theedgemarkets.com/my/article/drought-warm-winters-seen-hitting-india-rapeseed-output-oil-content

Looks like demand for palm oil will rise. Hope this will be positive.

Upward momentum started. :)

vincent555, I have a few Malay friends who have done very well in business, not only here in Malaysia but overseas, where got no government help, too.

Other races company also got issues, some accounting fraud, some steal money, some do side deals and sell company asset at lower price and pocket money.

So don't be a racist. The best thing for you to do is to apologize.

Jamesooi, thank you for the detailed analysis. Completely agree with you. Yesterday sold some other counter and today bought some more MAA at RM0.90. With your conservative valuation, stock can almost double from current price. But I am thinking it will more than double.

Have confirmed that Proton Oct sales was lower than Sept at 8,026 units as reported by MAA. It was number 4 brand in the country, behind leader Perodua (17,305 uts), Toyota (9,000 uts) and Honda (8,504 units).

I would not sell. I think stock is capable going beyond RM2.50. Jamesooi had made a good analysis. Cash per share RM1.3x. If sell MAAT for RM300 million thats another RM1.XX. If sell for RM400 million, than easily beyond RM3.

Heard Proton sales in Oct lower than Sept and Nov might be even worst.

To go to 2.80, they need to dispose of Proton or Proton sales need to increase to reduce losses. Proton is a drag on the entire group with hundreds of million of losses per year.

Unfortunately, Proton car sales has been decreasing despite giving bigger discounts. Based on MAA report, Proton sales for the last Quarter is as follows:

July '15: 10,867 cars
Aug '15: 9,040 cars
Sept '15: 8,723 cars

If the Suzuki venture works out, which should have been done years ago, today it will be a different story.

I will be monitoring Proton sales to see when to buy DRB shares.

LOL....hopefully continue up-trend....better to make something than nothing.....Hahaha

Waited at 0.065, than at 0.07, than at 0.75, again at 0.08 and could not get, looking how strong is the support, decided to go in at 0.10.....feel like kicking myself when could have bought at 0.07 a few days ago!!! Would have made a decent return already!!!

Given that the share price went up before suspension, my guess is something good is happening.

Yes, possible JV or M&A or, I am guessing, positive results from their operations.

I can only make a guess, on the 2 things that BAHVEST is doing:

1) Maybe have good news on rearing fish till big resulting in significant increase of revenue/profit. All these while telling us profit/revenue poor as change in policy to rear fish till bigger.

or, which is a better reason for suspension,

2) They were venturing into gold mining....maybe a BIG gold deposit find.

Anyway, have to sit tight till the announcement.

Yes, profit might be higher. Do keep in mind, per share basis, will drop due to dilution caused by bonus issue. This will cause the P/E to rise and the stock might have limited up-side. To me the share is fairly valued at the current price.

Consider sell first. Pick up later at lower price.

Thank you 5c0160.

If fail, my guess price will drop back to pre announcement price

I wouldn't go so far to say no hope, just not time..... to my above comment would like to add:

Ringgit down, material cost up, additional pressure on margin.

On the positive, why I am waiting on the sidelines, next year might be interesting for Proton with new models & Suzuki partnership for Proton.

I feel, at the current time, Proton is dragging the entire group down. If Proton sales can go up, lower losses or profit for proton, than entire group can go up.

I want to see how things work out. Better to be safe, buy when there is more certainty.

AEC coming into force next year. Things does not look too good going forward. Margins will be squeezed for automotive.

Looking at proton sales and promotions, I am sure proton running at a mega loss.

Good news is Honda sales is very strong.

EPF selling, EPF part of valuecap, if selling, I don't believe valuecap will support this share (looking at it from another point, ah jib won't support dr m).

Proton re-entering Chile....near term, nothing great, maybe sell additional 50 cars a month. Wonder what kind of margins for the near term. Once (I repeat once) brand get established, which will take a few years, than maybe margin will improve. Consumer in Chile will be worried if they decide to leave the market again.

Defence contract, very lucrative.

Bank Muamalat, should be reducing stake to meet BNM guideline. Banking sector not looking very good due to economic slow down and increase in NPL. Won't get a good price.

Property, Batu 3 proton factory land very valuable, but property sector is down right now.

DRB is in my watch list, I don't think this is the time to enter yet.