RHB Research maintains market perform on Proton, FV RM2.90

KUALA LUMPUR (Nov 30): RHB Research Institute is maintaining its Market Perform recommendation on PROTON HOLDINGS BHD [] and a fair value of RM2.90 that is derived from applying a 25% discount to its five-year average price-to-book of 0.39 times, applied to CY12 book value per share (BVPS).

It said on Wednesday that while the operational outlook for Proton remains challenging, much of the recent interest in the stock has likely been driven by speculation involving possible M&A activity, involving the disposal of all or part of Khazanah Nasional’s 42.7% block.

RHB Research said the recent speculation has involved an MBO, while rumoured potential suitors include the Naza group, DRB-HICOM and Sime Darby, as well as the sale of all or part of Lotus Group.

“With Khazanah’s high average holding cost and Proton’s latest BVPS and NTAPS (net tangible asset per share) at RM9.81 and RM7.62 respectively, that is a substantial premium to the market price, we believe the main stumbling block to any potential deal is likely to be pricing,” it said.