THE newly launched Proton X50 Proton is poised to be the new growth driver for the national automaker to conquer the B-segment sports utility vehicle (SUV) market.
Built based on Geely’s B-segment modular architecture platform which offers the flexibility for the car to be built in multiple sizes and powertrain options (including for electrification), the X50 utilises the 1.5 TD and 1.5 TGDi engines that were co-developed by Geely and Volvo.
The X50 which was rolled out through Proton’s social media channels yesterday is the second vehicle to be jointly-developed by Proton and Geely after Proton X70.
“We expect the Proton X50 to jumpstart Proton’s export growth strategy given that the group plans to export the Proton X50 to the Thailand market,” wrote analyst Mohd Shanaz Noor Azam in an automotive sector review.
As a proxy to Proton’s turnaround plan, CGS-CIMB Research has an “add” rating on DRB-Hicom Bhd with a target price of RM2.35.
“We expect DRB-Hicom’s Proton and Honda to benefit from the 100% sales tax exemption, given that both automakers derive nearly 99% of their sales volume from locally-assembled CKD models,” noted Mohd Shanaz.
“We see exciting new model launches driving Proton and Honda sales from the fourth quarter of this year onwards.”
Priced from RM79,200 for the Standard variant and up to RM103,300 for the Flagship 1.5 TGDi variant, CGS-CIMB Research deemed the pricing to be broadly in line with its expectation.
“Although the flagship model’s price was slightly above our RM100,000 estimate, it still offers a 10% or RM12,000 discount to the Honda HR-V model which is the market leader in the B-segment SUV,” opined Mohd Shanaz.
Proton has received over 23,000 bookings for the X50 since registration was open on Sept 16 with 70% of the bookings for the flagship and premium variants.
The car manufacturer started production roll-out of the X50 at its new production line in Tanjung Malim on Sept 20. The Tanjung Malim plant has undergone a RM1.2 bil expansion which was completed last year to accommodate the production of the X70 and X50.
“Our channel checks indicate that Proton’s production is not affected from the recent positive COVID-19 cases reported in its engineering division in Shah Alam,” noted Mohd Shanaz.
“We learnt that Proton is in the midst of ramping up production and it is currently producing around 4,000 and 3,000 units of the X50 and X70 respectively on a monthly basis in Tanjung Malim.”
At the close of mid-day trading today, DRB-Hicom was unchanged at RM1.95 with 318,400 shares traded, this giving the company a market capitalisation of RM3.77 bil. – Oct 28, 2020
