STOCKS NEWS MALAYSIA-RHB cuts DRB-Hicom's fair value
RHB Research cut its fair value on automotive-to-insurance conglomerate DRB-Hicom Bhd to 3.20 ringgit from 3.55 ringgit on the back of weaker-than-expected earnings weighed by its automotive division.
DRB's automotive segment revenue in the third quarter was dragged by weak sales of Proton and Suzuki car models, while finance costs for the period more than doubled due to borrowings taken to acquire Proton, RHB said in a note on Thursday.
The research house, however, kept its "buy" rating on the stock, adding that a formal collaboration arrangement between Honda and Proton could be a re-rating catalyst for the stock.
"We continue to believe DRB has multi-year latent earnings potential and hidden asset value, although time will be needed to implement new initiatives to rationalise its myriad businesses," RHB said.
DRB's shares rose 0.78 percent against the Malaysian benchmark stock index's 0.18 percent gain.
1132 (0332 GMT)
(Reporting by Anuradha Raghu; Editing by Jijo Jacob; email@example.com; Reuters Messaging: firstname.lastname@example.org)
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