KUALA LUMPUR: DRB-Hicom‘s share price rallied to a high of RM2.13 at midday on Tuesday, the highest since October 2014, as interest perked up for its automobile business under the Proton marque.
At midday, it was up 28 sen to RM2.11 and pushing its market capitalisation to RM3.98bil. There were 24.17 million shares done at prices ranging from RM1.83 to RM2.13.
The share price bucked the cautious blue chips where the FBM KLCI fell 16.88 points or 0.94% to 1,779.93, giving up all its gains from last Friday’s window dressing activities.
At the current price, DRB-Hicom is trading at a price-to-earnings of 6.73 times.
Analysts are upbeat on Proton Holdings Bhd as the national car company plots its return to the top with Chinese strategic partner Zhejiang Geely Holding Group Co Ltd in the driving seat.
StarBiz reported a big part of the deal with Geely involved the rights for Proton to use the Chinese firm’s best selling model – the Boyue sports utility vehicle (SUV) to penetrate the regional market.
The Chinese firm says it plans to use Proton’s huge, but massively under-utilised car plant in Tanjung Malim, Perak as a manufacturing hub for right-hand drive market in South-East Asia.
The new Proton SUV, based on the Boyue, is expected to be rolled out from the factory later this year with an eye for the Asean market.
The Proton factory in Tanjung Malim has a capacity to produce a million cars a year.
DRB-Hicom’s associate Pos Malaysia’s share price had also rallied in 2017 as it rides on the booming logistics segments under Pos Malaysia.
CIMB Equities Research has an Add with a targetprice of RM2.35 while Hong Leong Investment Bvank has a Buy with a TP of RM2.15. RHB Research also had a Buy with a TP of RM2.567 but AmInvestment Bank has a hold with a TP of RM1.89.