It fell 4% or four sen to 95.5 sen in morning trading before recovering to end the day at 99.5 sen, giving it a market capitalisation of RM1.92 billion. The stock has dropped 27.9% year-to-date.

The group posted a net loss of RM5.29 million in the third quarter ended Sept 30 (Q3 FY2024) from a net profit of RM70.8 million a year ago.

It attributed the loss to a reduced share of profit from joint ventures and associated companies under the automotive distribution sector, driven by lower vehicle sales volume and a higher mark-to-market loss on derivatives amounting to RM80.27 million.

Quarterly revenue rose by 3.4% to RM4.13 billion from RM4 billion a year earlier on higher sales from the banking, services, and aerospace and defence sectors.

For the nine-month period ended Sept 30 (9M FY2024), its net profit plunged 67.4% to RM69.2 million from RM212.4 million in the same period last year, despite a marginally higher revenue of RM12.23 billion.

Public Investment Bank (PublicInvest) said the results were below both its and consensus estimates, at 29.5% and 21.6% of full-year forecasts, respectively.

“We trimmed our FY2024-FY2026F earnings forecasts by an average of 20%, factoring in higher operating expenses and weaker performance across all its business divisions,” it said in a note today.

The research house maintained its “neutral” call but cut its target price (TP) to RM1.10 from RM1.38 previously.

Slump in auto, postal and property units

The group achieved revenue growth across key sectors with banking up 26.2% (RM1.59 billion), driven by higher financing income; aerospace and defence rose 24% (RM584.05 million) with more aircraft deliveries; and services grew 13.4% (RM691.5 million), supported by a rebound in air travel.

However, PublicInvest noted the group was impacted by lower revenue in its automotive, postal and property segments.

The automotive sector saw a slight revenue decrease of 0.6% year-on-year (y-o-y) due to lower vehicle sales, it said.

“The sale of Proton vehicles dropped 3.5% y-o-y to 38,127 units in Q3 FY2024 (Q3 FY2023: 39,511 units), impacted by intense competition and the influx of foreign brands into the domestic market,” it said.

DRB-Hicom has a 50.1% stake in national car maker Proton Holdings Bhd with the balance held by China-based automotive group Zhejiang Geely Holding Group.

The postal sector’s revenue fell 9.8% y-o-y to RM255.4 million due to a drop in international and bulk mail volume amid a broader industry slowdown.

The property segment’s revenue fell 11.7% y-o-y, primarily due to the completion of the concession project last year, with revenue now solely from maintenance services, it added.

Hong Leong Investment Bank (HLIB) said it has turned cautious on the Malaysian automotive market, citing stiff competition from Chinese brands in the RM100,000 and above price segment.

It cut its earnings forecast for the group by 57.5%, 30.4% and 33.4% for FY2024, FY2025 and FY2026 respectively, after taking into account the stiffer automotive market environment.

It also said Pos Malaysia Bhd and its defence contracting subsidiary will continue to drag on the group.

The research house downgraded its call to “hold” and slashed its TP to RM1 from RM1.55 previously.

Syed Mohktar has a 55.92% stake in DRB-Hicom via his vehicle Etika Strategi Sdn Bhd as of March 29, 2024, according to its 2023 annual report.