DRB (BUY) - Remain Affected by Thailand Flood

Stock Name: DRBHCOM
Company Name: DRB-HICOM BHD

Research House: HLG

Price Call: BUY

Target Price: 3.50

DRB (BUY)

Remain Affected by ThailandFlood

• In line ' Reported 3QFY3/12 core earning ofRM79.6m, leading 9M12 to RM304.5m, achieving 77.8% of HLIB estimates, butbehind consensus with 71.1%.

• Earnings was affected by the Thailand flood in Oct 2011, whichhad forced DRB 34% owned Honda Malaysia to shut down its Melaka assembly plant.The plant is only expected to gradually resume full production by 2Q12.
• The acquisition of Proton to be completed by end Mar2012, and will be integrated into DRB group gradually. The acquisition willcost DRB RM3bn. Net gearing is expected to increase to ~45% from current levelof 10%, while NTA/share will improve to ~RM3.17.
• Announced 1st gross interim dividend of 2 sen less 25% tax (net dividendof 1.5 sen).
• Maintain BUY with unchanged Target Price of RM3.50.

Source: HLIB Research 27 Feb 2012