Exora will help bolster Proton: MIDF Research

MIDF Research, which has a target price of RM2.90 for the proton, expects bookings to improve if consumers have the chance to see and test the MPV
Sharing protons Holdings Bhd (5304) May get help from a temporary launch of its latest model, the Exora multipurpose vehicle.

"Although the current test time is Exora May to push the proton in a higher level and spark, recovery is that the long tail", MIDF Research said in a report.

It has a target price of RM2.90 for the proton. The stock rose 6.6 percent to almost RM2.40 yesterday.

The Exora is launched by the Prime Minister today. Bookings to date amounted to 2,500 units which is less than MIDF expected.

However, it is expected that consumers in order to improve the chance to see and test the MPV.

Proton stock is up nearly 40 percent since March 31, compared with a gain of 7 percent broader market over the same period.

"The speculation of the merger in a Perodua and we coupled the launch of Exora, short-term price catalysts appear to be in place," said MIDF.

Speculation of a merger between Proton and Perodua, which is nothing new, has taken a pinch of salt, MIDF added.

This is because it is a disorder. Proton is the major shareholder Khazanah Nasional Bhd with 42.7 per cent, followed by the Employees Provident Fund, against 15.4 per cent and 7.9 per cent with Petronas.

Perodua has five major partners UMW Corp Sdn Bhd holds the largest share at 38 percent.

The merger will result in a new company controlled 60 percent of local markets.

"The merger has its advantages - economies of scale, market dominance, etc, but a broader national car companies can create duplications ie products, a network of dealers, suppliers, etc." said MIDF. As it is, is to find protons, it is difficult to reduce its network of suppliers and distributors.

However, the protons appear as a winner, if it ends up controlling the merger, because it means the elimination of a close rival.