DRB-Hicom changes new financial year-end to December


DRB-HICOM Bhd has revised the group’s financial year-end following its recent board meeting.

The group in a statement last week noted its new financial year-end will be changed to December from the present month of March.

“Thus, the current financial year-end will be Dec 31, 2019 — a period of nine months — having commenced on April 1, 2019,” it said.

DRB-Hicom said its intention is to align the group’s financial year-end to that of the nation’s fiscal year, as well as to the majority of listed companies on Bursa Malaysia.

DRB-Hicom posted RM127.86 million in net profit during the fourth quarter of its recent financial year.

Meanwhile, Alam Flora Sdn Bhd, DRB-Hicom’s waste management company, is reportedly on the verge of signing a deal with power energy company Malakoff Corp Bhd.

Malakoff is expected to take over Alam Flora by year-end in a deal valued at RM944 million.

DRB-Hicom’s share price has risen by 14% last month following the encouraging pick-up in vehicle sales by its 50.1%-owned subsidiary, Proton Holdings Bhd.

Proton’s market share in June hit 18.1%, its highest level recorded since 47 months ago in July 2015.

DRB-Hicom shares closed three sen lower last Friday at RM2.43, valuing the company at RM4.7 billion.

Kenanga Investment Bank Bhd recently upgraded its recommendation on DRB-Hicom to ‘Market Perform’ from ‘Underperform’.

Its analyst Wan Mustaqim Wan Ab Aziz has a price target of RM2.20.

“Key risks to our call are the faster than expected rollout of new models under the new Zhejiang Geely Holding Group Co Ltd-Proton management and higher than expected associates’ contribution,” Wan Mustaqim stated in his company report.

On another note, Hong Leong Investment Bank Bhd analyst Low Ley Yee expects DRB-Hicom to continue reporting earnings improvement on Proton’s turnaround.

“Following the X70 launch, Proton has been reporting strong sales growth and the positive momentum is likely to continue ahead of the exciting models lined up in 2019-2020.”

DRB-Hicom’s stock price has advanced 13% in the past 52 weeks and trades at 15 times its estimated earnings per share for the coming year.

The company’s dividend yield is 1.2% on a trailing 12-month basis and 0.6% based on Bloomberg dividend forecasts for the next 12 months.