The renewal of their relationship fuels speculation that there could be a collaboration between the two companies, in the development of a small car for local and regional markets. The CKD components will be assembled at DRB-Hicom's Pekan manufacturing plant. The agreement, which would start upon fulfilment of all conditions before March 31, 2014, is for a five-year period, and renewable for the same duration. While it would be positive for the group over the long term, we do not expect the collaboration to contribute significantly to DRB-Hicom's earnings. Tata Motors and DRB-Hicom units USF-Hicom (M) Sdn Bhd and DRB-Hicom Auto Solutions Sdn Bhd, also inked an agreement for the import of CBUs and CKD components for assembly in Malaysia.

As a result, FY13 earnings have been revised up 11.8% to RM123 million.DRB-Hicom BhdĪMRESEARCH (Sept 10): DRB-Hicom inked an agreement with Tata Motors Ltd for the exclusive distribution rights of Tata CBU and CKD commercial vehicles in Malaysia, rekindling their earlier relationship in the segment, that ended in 2008. Meanwhile, the higher operating margin is due to the stronger-than-expected operating margin from the consumer packaging business, acquired from GW Plastic. Considering this and a higher-than-expected sales contribution from its Mutiara Mas development, we have revised our sales forecast upwards by 2.2%, 2.9% and 3.3% for FY13, FY14 and FY15, to RM1.22 billion, RM1.59 billion and RM1.78 billion respectively. Given that more than 80% of the group's manufacturing business is export-oriented and the purchase of its raw materials is denominated in US dollar, the recent strengthening of the greenback against the ringgit has resulted in an overall increase in the average USD/RM for the year.īased on management's guidance, we have increased our assumption for FY13, to RM3.07. TA SECURITIES (Sept 9): We maintain our 'buy' recommendation on Scientex, with a higher target price (TP) of RM5.93, for its manufacturing and property segments. We raise our FY13 new job assumption for construction to RM1.1 billion, but maintain our FY14 and FY15 job win assumptions at RM900 million and RM950 million respectively.Scientex Bhd We estimate that Kimlun's total outstanding order book stands at about RM2 billion - much higher than the RM1.6 billion as at December 2012, and should support earnings growth ahead. Kimlun's job replenishment rate has accelerated over the past two months prior to Sept 16, and we believe it was driven by the post-election pent-up demand. Assuming a net margin of 5%, we estimate a net profit contribution of RM2 million, RM9 million and RM4 million, in FY13, FY14 and FY15 respectively. We are raising our FY13 to FY15 EPS forecasts by 2%, 4% and 7%, as we impute for the stronger-than-expected job wins.

This brings the total construction wins YTD to RM1 billion - a record for the company. MAYBANK IB RESEARCH (Sept 9): Kimlun has clinched two sizeable projects, with a total value of RM326 million, in Iskandar Malaysia.

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