October 15, 2010

PROTON - OSK raises Proton's FY10-FY11 forecast

Stock Name: PROTON
Company Name: PROTON HOLDINGS BHD
Research House: OSK



OSK Research today raised Proton Holdings' revenue forecast for the 2010 and 2011 financial years by 1.8 per cent and 5.2 per cent, respectively.

"Given our earlier conservative forecast of 10,000 units of Inspira, against our new forecast of 14,400 units for next year, coupled with its higher average selling price, we are now raising our FY10 and FY11 revenue forecast," it said in a research note today.

Noting that a Lancer was only selling for RM60,000 in Langkawi, the research house said margins were compellingly lucrative for Proton once its boosts its localisation rate to 65 per cent next year, helped by the absence of excessive excise duty.

Following the higher revenue base due to increased pricing amid improved costs, OSK said it was consequently raising its bottom-line by 9.2 per cent and 10 per cent for FY11-FY12.

"This ultimately raises our fair value from RM5.67 to RM6.18 as we roll over our earnings base to FY12 at a lower multiple of 8.5 times (versus 9 times), with our "buy" call retained," it added. -- Bernama


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