DRB-Hicom unlikely to go private

  • We must carry on Karpal’s struggle, says Kit Siang
    We must carry on Karpal’s struggle, says Kit Siang

    A light may have gone out in the country with the sudden death of Karpal Singh but his party comrade Lim Kit Siang said the best way to honour his memory is to continue with his fight for “justice, rule of law and democracy”. The DAP adviser said Malaysians, including those who had never met Karpal, have taken his death as a personal loss,... …

  • Penang to give Karpal official send-off

    The Penang government will provide veteran lawmaker Karpal Singh an official send off.   According to Chief Minister Lim Guan Eng, the Penang flag would be used to cover Karpal's cortege.   All state agencies will fly the Penang flags at half-mast for three days until the funeral on Sunday, said Lim.   He added that a public ceremony at the Dewan Sri Pinang will be held on Sunday from 9am to 11am for the public to pay their respects.    Lim said that the state exco had decided on this during an …

  • Sarawak leaders hail Karpal’s tenacity to fight until the end
    Sarawak leaders hail Karpal’s tenacity to fight until the end

    If there is one thing that politicians on both sides of the divide in Sarawak agree on about Karpal Singh, it is his dogged tenacity “to fight until the end” to uphold his beliefs. “We may not be on the same side of the divide but I admire his unwavering stand on certain political issues which he believed in,” Sarawak Land Development Minister... …

  • Kelantan should rethink hudud plan, says Dr Mahathir – Bernama
    Kelantan should rethink hudud plan, says Dr Mahathir – Bernama

    The Kelantan government should rethink its plan to implement hudud in the state, as the basic principle that must be emphasised is justice, said former prime minister Tun Dr Mahathir Mohamad (pic). He said this was because the Kelantan government was seen as stressing more on the forms of punishment in its attempt to implement the Islamic... …

  • New phase, not abandonment of MH370 search, says Hishammuddin
    New phase, not abandonment of MH370 search, says Hishammuddin

    KUALA LUMPUR, April 17 — Searchers may be forced to adjust their hunt for Flight MH370 after fruitless forays underwater, Datuk Seri Hishammuddin Hussein said today while renewing vows to keep... …

  • Selangor MB: No need to say if consulted state economic adviser
    Selangor MB: No need to say if consulted state economic adviser

    SHAH ALAM, April 17 — Selangor Mentri Besar Tan Sri Khalid Ibrahim today said he was not obliged to declare if he consults state economic adviser Datuk Seri Anwar Ibrahim on key decisions. While... …

DRB-Hicom Bhd

(Feb 5, RM2.57)

Maintain buy at RM2.57 with a revised target price of RM3.65 (from RM3.35): DRB-Hicom is a deep value stock (43% discount to sum-of-parts [SOP]). But a privatisation is unlikely, even with the perceived sensitive nature of some of its businesses such as Defence Technologies Sdn Bhd (Deftech) where there is little disclosure. Moreover, the privatisation rumour is not new and would have already occurred at lower levels.

However, it may spin off its motor business given the ongoing capital requirements for Proton, Lotus and the expansion of Volkswagen capacity by 50,000 units by 2016/17. We are confident DRB-Hicom will turn around Proton given recent developments:

(i) rationalising the distribution business;

(ii) tiering auto parts suppliers;

(iii) purchasing engine from Petroliam Nasional Bhd; and (iv) collaboration with Honda.

We expect Bank Muamalat Malaysia Bhd and Pos Malaysia Bhd to be the anchors of its services division (three-year earnings before interest and tax [Ebit] compound annual growth rate [CAGR] of 14%).

The bank is expected to register at least RM200 million profit before tax for the financial year ending March 31 (FY13) (first half: RM147 million) driven by higher financing income, fee and non-funded income.

The expansion of Pos’ courier business, transformation into a one-stop retail shop, and Ar-Rahnu, will drive up profitability further.

Alam Flora Sdn Bhd, Puspakom Sdn Bhd and KL Airport Service Sdn Bhd have vast potential with the expansion to two new states, potential mandatory inspection of private vehicles and opening of klia2 respectively.

We raise our target price by 9% to RM3.65 (20% discount to SOP value) after adjusting for the other landbank and a revised target price for Pos of RM4.60 (against market value).We cut forecast FY13 net profit by 8% after factoring in our forecasts for Pos, but raised FY15F net profit by 7% with the inclusion of new property launches.

We expect property to be its fastest growing division (three-year Ebit CAGR of 174%), led by new launches, Glenmarie Gardens and Glenmarie Puchong, in FY14/FY15. This division is under-appreciated; it offers RM21 billion gross development value and 3,736 acres of land. — HwangDBS Vickers Research, Feb 5

 

This article first appeared in The Edge Financial Daily, on February 6, 2013.

 

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  • ‘Huge’ Hindu, Buddhist statues against Islam, ex-judge says The Malay Mail Online
    ‘Huge’ Hindu, Buddhist statues against Islam, ex-judge says

    KUALA LUMPUR, April 16 — The “huge” statues at a Hindu temple in Batu Caves and Buddhist temple in Penang are an affront to Islam as the religion forbids idolatry, a retired Court of Appeals judge... …

  • My dad was in KL to see me, says Gobind The Malaysian Insider
    My dad was in KL to see me, says Gobind

    Bukit Gelugor MP Karpal Singh, who died in an accident early this morning, was in Kuala Lumpur to visit his son Gobind Singh Deo who was ill. A distraught Gobind said he was informed of the accident at 2.15am today, and he and his wife rushed to the scene where he saw his father's mangled car and his father's body. "My brother Ramkarpal was... …

  • Langkawi BN MP pokes fun at Karpal Singh’s remains The Malaysian Insider
    Langkawi BN MP pokes fun at Karpal Singh’s remains

    As the nation mourns the passing of a great politician, BN MP Datuk Nawawi Ahmad insulted the late Karpal Singh by posting a picture of the veteran politician's blood-smeared face as he lay in his Toyota Alphard following a tragic accident this morning. Along with the Facebook picture was a newspaper cutting on Karpal being opposed to the... …