This is how DRB-Hicom is setting sights high in 2022

DRB-HICOM Bhd, one of Malaysia’s leading corporations, involved in the automotive industry is setting sights high this year.

And for that matter, analysts are saying they would maintain their ‘hold’ recommendation for the company.

“We maintain our HOLD recommendation and SOP-derived fair value (FV) of RM1.65 for DRB-Hicom (DRB). Our FV implies 20x PER of 2022F earnings,” says AmBank Research.

Despite the chip shortage and supply disruption issues, Proton and Honda have set ambitious sales targets of 150,000 units and 80,000 units respectively, which imply 34% and 51% YoY growth.

Proton is also aiming to, at least, double its export sales in 2022 from 2021’s 3,018 units with Pakistan being the key growth market.

The RM32 billion investment to develop Automotive High-Technology Valley as reported by the media recently will not be solely coming from DRB’s own pocket.

DRB-Hicom and smart cars

The amount is an estimated value of total investments from various parties, including vendors and potential investors for the next 10–12 years.

The goal is to transform Proton City into a smart city while attracting high-tech investments, especially within the automobile industry.

Meanwhile, discussions between smart and Proton are still ongoing. The first model rollout is expected this year and it is most likely to be fully imported.