Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD
Research House: OSK
KUALA LUMPUR: PROTON HOLDINGS BHD [] share price rose in early trade Thursday, May 27 after OSK Research maintained its buy call on the stock at RM4.44 and raised its target price to RM6.94.
At 9.20am, Proton was up 18 sen to RM4.62 with 71,500 shares done.
OSK Research in a note on Thursday said Proton's FY10 core earnings were spot-on with its estimates and consensus, fueled by higher vehicles sales and improved operating efficiency.
It said Proton was likely to see sustainable profitability margins moving forward, backed by the uptrend in sales. In addition, Proton would make massive capex spending of close to RM1 billion in research and development (R&D), it said.
"As such, we have raised our earnings by 7.5% for FY11 on a lower effective tax rate assumption given its favorable investment allowances.
"Due to its capex commitment and the fact that Proton did not announce any dividends this year, we have also excluded the possibility of dividends over the next two years," it said.
Proton, which posted a net profit of RM22.8 million for the fourth quarter ended March 31, 2010 (4QFY10) is expected to make an announcement about a possible collaboration with German carmaker Volkswagen AG (VW) in one to two weeks.
Proton's 4Q net profit of RM22.8 million compares to a net loss of RM322.97 million a year ago. The turnaround was aided by an R&D grant of RM99 million from the government during the quarter under review while the carmaker also wrote off RM118 million for R&D expenditure.
Company Name: PROTON HOLDINGS BHD
Research House: OSK
KUALA LUMPUR: PROTON HOLDINGS BHD [] share price rose in early trade Thursday, May 27 after OSK Research maintained its buy call on the stock at RM4.44 and raised its target price to RM6.94.
At 9.20am, Proton was up 18 sen to RM4.62 with 71,500 shares done.
OSK Research in a note on Thursday said Proton's FY10 core earnings were spot-on with its estimates and consensus, fueled by higher vehicles sales and improved operating efficiency.
It said Proton was likely to see sustainable profitability margins moving forward, backed by the uptrend in sales. In addition, Proton would make massive capex spending of close to RM1 billion in research and development (R&D), it said.
"As such, we have raised our earnings by 7.5% for FY11 on a lower effective tax rate assumption given its favorable investment allowances.
"Due to its capex commitment and the fact that Proton did not announce any dividends this year, we have also excluded the possibility of dividends over the next two years," it said.
Proton, which posted a net profit of RM22.8 million for the fourth quarter ended March 31, 2010 (4QFY10) is expected to make an announcement about a possible collaboration with German carmaker Volkswagen AG (VW) in one to two weeks.
Proton's 4Q net profit of RM22.8 million compares to a net loss of RM322.97 million a year ago. The turnaround was aided by an R&D grant of RM99 million from the government during the quarter under review while the carmaker also wrote off RM118 million for R&D expenditure.
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