Stock Name: DRBHCOM
Company Name: DRB-HICOM BHD
Company Name: DRB-HICOM BHD
| Research House: RHB | Price Call: HOLD | Target Price: 1.90 |
23rd November 2011
Top Story: DRB Hicom: Sequentially better, but Thai floods derail 2HFY12 earnings Market Perform
Results Preview
'' The expected qoq earnings growth is expected to come from the 10.3% qoq recovery in total industry volume (TIV) with Honda and Isuzu sales up 11.5% and 17.1% qoq respectively, offset by flat to lower qoq sales of other vehicle marques distributed by the group.
'' Maintain SOP fair value of RM1.90 that applies a holding company discount of 40%. While DRB offers FY11-14 recurring EPS CAGR of 14.0%, CY12 PER of 8.5x is close to its 5-year average of 8.7x.
Corporate Highlights
MAS: No bold moves to change the game Underperform
Briefing Note
'' We had expected more bold and dramatic moves from the new management such as a steep reduction in headcount, a total revamp of its procurement system, recapitalisation of its balance sheet and roping in a leading international airline as equity partner to help strengthening processes, revitalising work culture and broadening market reach and presence.
'' Fair value is RM1.04. Maintain Underperform.
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