DRB-HICOM Bhd's five-year business and strategic plans for Proton Holdings Bhd are good to go, with the key targets of selling half a million cars by 2018 and making more than RM1 billion profit.
A group of 30 analysts and fund managers was told by senior Proton executives on Wednesday that the DRB-HICOM board had approved the plans.
The sales quantum would include 150,000 units for exports, Proton deputy chief executive officer Datuk Lukman Ibrahim told the analysts and fund managers during a tour to Proton City in Tanjung Malim, Perak.
The national carmaker will roll out Phase 1 of the Perdana replacement model for government use in December 2013 under the plans, Lukman noted.
Phase 2 of the Perdana replacement model, which targets the mass market, will only be rolled out within two years.
Proton, via its strategic collaboration with Honda Motor Co, will start producing an initial 3,000 units of the new Perdana by next month.
The carmaker will also introduce a global small car (GSC) in the B-segment early next year.
"We believe the GSC will be a critical game-changer for Proton as it needs the volume in the popular B-segment to drive its capacity utilisation and profitability," Public Investment Bank Bhd said in its report yesterday.
"We understand that it would produce about 60,000 units per annum in the initial stage," AmResearch Sdn Bhd's Thomas Soon wrote in his report.
Proton is looking at developing a hybrid model, in line with its efforts to promote the development of "alternative energy" vehicles.
Soon said Proton felt that the government should not only focus on energy-efficient vehicles under the upcoming National Automotive Policy.
It is asking the government to consider further incentivising local research and development in line with its policy to spur the knowledge-based economy.
Proton also plans to re-enter the United Kingdom market by next month after meeting the minimum standards requirements there. It is targeting the same for the Middle East by the first quarter of 2014.
Proton's latest model, the Suprima S, is scheduled to be launched in Australia by the middle of this month, following its launch in Indonesia recently.
The next markets for the model include Thailand and Brunei.
Public Investment and AmResearch said Proton will only be relocating its Shah Alam facilities beyond the five-year period.
This is because the existing capacities of 150,000 units per year in Tanjung Malim and 210,000 units per year (including 150,000 at the main plant) in Shah Alam can still meet production requirements over the next few years.
Public Investment has maintained its "outperform" call on DRB-HICOM stock with an unchanged target price of RM3.53 based on sum-of-parts (SOP) valuation.
AmResearch has reaffirmed its "buy" on the group with a fair value of RM3.65 per share, which is a 15 per cent discount to its SOP value of RM4.31 per share.
