STOCKS NEWS MALAYSIA-Kenanga starts covering DBB-Hicom with "outperform" call

Kenanga Research initiated coverage of DRB-Hicom Bhd with an "outperform" call and a target price of 3.45 ringgit per share, citing strong growth prospects for the firm's car-making and property business.

"In our view, the stock is undervalued, underpriced and clearly under-appreciated," Kenanga said in a research note on Friday.

There is strong growth potential for the company's automotive business which makes Proton cars. The DRB-Hicom's assembly contract with Volkswagen will also help, it said, adding that the firm's property division will benefit from the huge land banks it holds.

"The group has always had a large development land bank with the hot ones now being in Iskandar, Johor and in Glenmarie, Klang Valley," Kenanga said.

As of 1133 (0313 GMT) DRB-Hicom was unchanged at 2.60 ringgit per share while the benchmark index was up 0.14 percent at 1637.61.

(Reporting by Siva Sithraputhran siva.sithraputhran@thomsonreuters.com; Editing by G.Ram Mohan; Reuters Messaging: Siva.sithraputhran.thomsonreuters.com@reuters.net)