KUALA LUMPUR: Hwang DBS Vickers Research has raise its target price for PROTON HOLDINGS BHD [] to RM6.60, after upgrading valuation multiple to 0.7x CY11F NTA (vs. 0.5x previously).
'This is a 10% discount to its mean+1SD of 0.8x, which is its historical peak valuation (Fig. 4), and reflects its positive outlook for the consumer sector. With more than 40% capital appreciation potential, Proton remains a BUY,' it said in a report on Tuesday, Aug 24.
HDBSVR said Proton's annualised 1QFY11 profit beat its estimate, but was within consensus'.
While 1QFY11 revenue of RM2.3 billion (+1.2% q-o-q; +24% y-o-y) was within its estimate, EBIT margin rose 0.7ppt to 4.5% q-o-q (+1ppt y-o-y).
Domestic division revenue grew 7% q-o-q on the back of 3% increase in unit sales to 40,000 units (+10% y-o-y) and 4% higher average selling price to RM49,000 (+10% y-o-y).
'This was due to larger contribution from higher margin vehicles. Proton also benefited from reduced infighting among dealers (following the realignment of dealerships) and an improved inventory system,' it said.
'This is a 10% discount to its mean+1SD of 0.8x, which is its historical peak valuation (Fig. 4), and reflects its positive outlook for the consumer sector. With more than 40% capital appreciation potential, Proton remains a BUY,' it said in a report on Tuesday, Aug 24.
HDBSVR said Proton's annualised 1QFY11 profit beat its estimate, but was within consensus'.
While 1QFY11 revenue of RM2.3 billion (+1.2% q-o-q; +24% y-o-y) was within its estimate, EBIT margin rose 0.7ppt to 4.5% q-o-q (+1ppt y-o-y).
Domestic division revenue grew 7% q-o-q on the back of 3% increase in unit sales to 40,000 units (+10% y-o-y) and 4% higher average selling price to RM49,000 (+10% y-o-y).
'This was due to larger contribution from higher margin vehicles. Proton also benefited from reduced infighting among dealers (following the realignment of dealerships) and an improved inventory system,' it said.
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