Proton (HOLD) - Below Expectations

Proton (HOLD)

Below Expectations

• Reported 3QFY3/12 core losses of RM102.5m, taking 9M12 to core losses of RM79.8m, below HLIB’s FY12 forecast profit of RM82m and consensus of RM64.5m.
• Proton car sales dropped significantly in 3Q12, under heavy competition from Perodua’s new MyVi. Furthermore, the changes of car sales mix to lower end had lowered Proton’s overall revenue.
• Revenue from Lotus units also trended down in 3Q12 due to restructuring exercise and the on-going economy crisis in the Europe and US.
• The acquisition exercise of Proton by DRB Hicom is expected to be complete by end Mar 2012, and Proton will be delisted from Bursa Malaysia.
• We maintained our forecast with a HOLD recommendation and unchanged TP of RM5.50 (General offer price by DRB). 

Source: HLIB Research 1 March 2012