KUALA LUMPUR: DRB-Hicom shares and its warrants rose in active trade on Tuesday, March 8, as trading interest was underpinned by its unit DRB-Hicom Defence Technologies Sdn Bhd's success in securing the RM7.55 billion government defence contract.
At 9.10am, the FBM KLCI was up 9,18 points to 1,524,92. Turnover was 56.11 million shares valued at RM57.95 million. There were 127 gainers, 31 losers and 76 stocks unchanged.
DRB-Hicom rose five sen to RM1.90, the call warrants, DRB-Hicom-CD added one sen to 14.5 sen, DRB-Hicom-CC two sen to 39.5 sen and DRB-Hicom-CE 1.5 sen to 14.5 sen.
Hang DBS Vickers Research to set a new target price of RM3.80 for DRB-Hicom after was contracted to supply 257 units of armoured wheeled vehicles (AWV) worth RM7.55 billion.
On Monday, March 7, DefTech accepted the letter of award from the federal government for the contract to supply armoured wheeled vehicles (AWV). The contract is to design and supply 257 units of the 8x8 AWV, which will be in eight variants. The contract valued at RM7.55 billion is for a period of seven years commencing from 2011.
HDBSVR said it expects a substantial rerating with this newsflow and as the market tags a higher premium to its services business.
'Our new TP of RM3.80 factors in some contribution from the Deftech contract - PE of 15x of CY12 earnings, tagged to our target market PE given it has virtually monopoly in this business,' it said.
It raised its FY12-FY13F EPS by 3%-10% by assuming contract tenure of seven years, 12% pretax margins, maintenance is back ended and there is three and 12-months recognition in FY12-13F respectively.
At 9.10am, the FBM KLCI was up 9,18 points to 1,524,92. Turnover was 56.11 million shares valued at RM57.95 million. There were 127 gainers, 31 losers and 76 stocks unchanged.
DRB-Hicom rose five sen to RM1.90, the call warrants, DRB-Hicom-CD added one sen to 14.5 sen, DRB-Hicom-CC two sen to 39.5 sen and DRB-Hicom-CE 1.5 sen to 14.5 sen.
Hang DBS Vickers Research to set a new target price of RM3.80 for DRB-Hicom after was contracted to supply 257 units of armoured wheeled vehicles (AWV) worth RM7.55 billion.
On Monday, March 7, DefTech accepted the letter of award from the federal government for the contract to supply armoured wheeled vehicles (AWV). The contract is to design and supply 257 units of the 8x8 AWV, which will be in eight variants. The contract valued at RM7.55 billion is for a period of seven years commencing from 2011.
HDBSVR said it expects a substantial rerating with this newsflow and as the market tags a higher premium to its services business.
'Our new TP of RM3.80 factors in some contribution from the Deftech contract - PE of 15x of CY12 earnings, tagged to our target market PE given it has virtually monopoly in this business,' it said.
It raised its FY12-FY13F EPS by 3%-10% by assuming contract tenure of seven years, 12% pretax margins, maintenance is back ended and there is three and 12-months recognition in FY12-13F respectively.
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