KUALA LUMPUR: CIMB Equities Research is retaining an Add and sum-of-parts based target price of RM2.90 for DRB-Hicom which is its top pick in the auto sector.

It said on Friday DRB-Hicom is optimistic of a successful turnaround at Proton, underpinned by the 10-year business plan set out by the carmaker’s new management team led by CEO Dr Li Chunrong from Geely.

“DRB-Hicom said the rationale behind its proposal to dispose of its non-core property assets was concern over the lack of future funding to redevelop these assets. 

“The group also expects its services division to benefit from growing e-commerce activities through Pos Malaysia and potential stake rationalisation in Bank Muamalat,” it said.

CIMB Research and 80 analysts and fund managers attended DRB-Hicom’s investors’ briefing which was hosted by group managing director Datuk Seri Syed Faisal Syed Albar. 

At the briefing, DRB-Hicom shared four strategic focus areas to drive future growth.

1) Turnaround of Proton by limiting operational losses via quality improvements, cost optimisation and new model launches.

2) Review of portfolio by exiting non-core property assets and focusing on industrial land development.

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