KUALA LUMPUR: Shares of PROTON HOLDINGS BHD [] rallied on Monday as newsflow about more suitors for Khazanah Nasional Bhd’s 42.7% stake in the national car maker whetted the appetite of investors.
At 3.33pm, Proton share price was up 29 sen to RM5.28 with 6.77 million shares done. The call warrants Proton-CG added eight sen to 56 sen and Proton-CH also eight sen to 51 sen.
The FBM KLCI rose 3.14 points to 1,517.27. Turnover was 1.18 billion shares valued at RM1.04 billion. The broader market showed an improvement, with 419 gainers, 279 losers and 281 stocks unchanged.
OSK Research said it was maintaining its trading buy for Proton at an unchanged fair value of RM5.87, premised on a 10% premium to its adjusted NTA per share of RM5.34, which includes a revaluation surplus of RM147.6 million on the group's land bank and after stripping off all intangibles and inventories, as well as the estimated equity value of loss-making Lotus.
“The stock’s 1HFY12 NTA is RM7.62,” it said in a research note.
OSK Research said the attempts from Proton chairman Datuk Nadzmi Mohd Salleh and other joint bidders do not represent enough value to ensure Proton’s turnaround.
“We still reiterate that DRB-Hicom is currently Proton’s best suitor given its tie-up with Volkswagen, which intends to set up a large ASEAN production hub in Malaysia. This is followed by Naza, which plans to localise production of the Chevrolet marquee by making use of Proton’s Tanjung Malim plant,” it said.
OSK Research said funding would not be an issue for DRB-Hicom as the group’s net gearing ex-bank related assets and liabilities stand at only 17%, as indicated by its last quarterly results.
“This can be easily stretched to 50%-70% to acquire Proton and possibly even higher, given Proton’s onerous capex needs and its planned R&D activities and expansion,” it said.
The research house said interestingly DRB-Hicom recently announced that it is raising RM500m from the sukuk market for working capital purposes, as well as other potential acquisitions and expansion. It has an option to maximize this sukuk issue to the tune of RM1.8 billion.
At 3.33pm, Proton share price was up 29 sen to RM5.28 with 6.77 million shares done. The call warrants Proton-CG added eight sen to 56 sen and Proton-CH also eight sen to 51 sen.
The FBM KLCI rose 3.14 points to 1,517.27. Turnover was 1.18 billion shares valued at RM1.04 billion. The broader market showed an improvement, with 419 gainers, 279 losers and 281 stocks unchanged.
OSK Research said it was maintaining its trading buy for Proton at an unchanged fair value of RM5.87, premised on a 10% premium to its adjusted NTA per share of RM5.34, which includes a revaluation surplus of RM147.6 million on the group's land bank and after stripping off all intangibles and inventories, as well as the estimated equity value of loss-making Lotus.
“The stock’s 1HFY12 NTA is RM7.62,” it said in a research note.
OSK Research said the attempts from Proton chairman Datuk Nadzmi Mohd Salleh and other joint bidders do not represent enough value to ensure Proton’s turnaround.
“We still reiterate that DRB-Hicom is currently Proton’s best suitor given its tie-up with Volkswagen, which intends to set up a large ASEAN production hub in Malaysia. This is followed by Naza, which plans to localise production of the Chevrolet marquee by making use of Proton’s Tanjung Malim plant,” it said.
OSK Research said funding would not be an issue for DRB-Hicom as the group’s net gearing ex-bank related assets and liabilities stand at only 17%, as indicated by its last quarterly results.
“This can be easily stretched to 50%-70% to acquire Proton and possibly even higher, given Proton’s onerous capex needs and its planned R&D activities and expansion,” it said.
The research house said interestingly DRB-Hicom recently announced that it is raising RM500m from the sukuk market for working capital purposes, as well as other potential acquisitions and expansion. It has an option to maximize this sukuk issue to the tune of RM1.8 billion.
