This has prompted Hong Leong Investment Bank (HLIB) to upgrade its call on the conglomerate controlled by tycoon Syed Mokhtar Albukhary to a “buy”, with a higher target price (TP) of RM1.40 from RM1.22 previously.
DRB-Hicom’s net profit for the first quarter ended March 31 (Q1 FY2026) surged 154% to RM45 million from RM17.72 million a year ago, while revenue rose 15.74% to RM4.76 billion from RM4.11 billion previously.
However, the sterling Q1 results did little to boost the company’s shares, which closed three sen or 2.6% lower at RM1.11, giving it a market capitalisation of RM2.15 billion.
In its exchange filing yesterday, the group said the mobility segment’s earnings growth was supported by higher Proton sales volumes and stronger contributions from the aerospace business following the acquisition of CTRM AeroSystems Sdn Bhd in December 2025.
The banking segment, via Bank Muamalat Malaysia Bhd, recorded improved performance on the back of higher financing income, driven by growth in financing volumes and an expanding customer base.
The group said Proton maintained strong momentum in Q1 with sales rising 40.1% year-on-year to 49,140 units, supported by its growing electric vehicle (EV) portfolio.
The recently launched e.MAS 5 emerged as Malaysia’s best-selling EV, achieving sales of 6,701 units year to date.
DRB-Hicom owns a 50.1% majority stake in national carmaker Proton while China’s Zhejiang Geely Holding Group holds the remaining 49.9%.
In a note today, HLIB said DRB-Hicom’s Q1 core earnings came in within its expectations at 20.9% but above consensus (28.4%).
“Proton sales are expected to remain resilient, driven by strong demand for its recently launched models (Saga and e.MAS 5), alongside an exciting pipeline of upcoming launches,” it said, adding it anticipates stronger performances in the coming quarters.
HLIB noted that Zhejiang Geely is also planning to rebadge the Saga for the Philippines market, potentially expanding its regional footprint.
It added that Proton will also benefit from the government’s RM4,000 grant for the car scrapping programme as well as the updated EV policy for imported completely built-up (CBU) models.
Meanwhile, Public Investment Bank has maintained its “underperform” call with an unchanged TP of 84 sen, citing the subdued outlook for the auto sector and absence of near to medium-term catalysts.
“Malaysia’s auto sector is anticipated to normalise in 2026. While mass-market national brands are expected to remain resilient, the non-national segment faces challenges from weakened consumer confidence, rising cost of living, potential excise duty changes, and a market shift towards competitively priced Chinese brands.
“These factors are compressing margins and constraining earnings growth throughout the industry,” it said.
Syed Mokhtar held a 55.9% stake in DRB-Hicom via his vehicle Etika Strategi Sdn Bhd as of March 26, 2026.