Latest news with #DRB-Hicom
The Star
4 hours ago
- Business
- The Star
Mangrove restoration collab takes root along Tg Karang coast
Happy volunteers taking part in restoring mangroves on the Kuala Selangor coast. A total of 450 mangrove saplings have been planted at Banjar North Forest Reserve in Tanjong Karang as part of a joint conservation effort on the Kuala Selangor coast. The Mangrove Forest Conservation Project, aimed at restoring and protecting mangrove ecosystems, is a collaboration between DRB-Hicom and Universiti Teknologi Mara (UiTM). The event saw volunteers from DRB-Hicom's Sahabat programme and UiTM students pitching in to plant Rhizophora mucronata (bakau kurap) during the launch of the project. According to a media statement from DRB-Hicom, the project will ultimately see 1,000 saplings planted, with continuous monitoring to support the rehabilitation of the coastal area impacted by erosion. Speaking at the launch, DRB-Hicom chief communication officer Cairil Irwan Amir said the Mangrove Forest Conservation Project reflected the company's emphasis on sustainability, which included active engagement with academic institutions and local communities. 'This programme is a long-term investment in our environment and our people. The 'bakau kurap' planting is part of the collaboration between DRB-Hicom and UiTM. 'By working hand-in-hand with UiTM, we hope to not only have a positive impact on the environment, but also contribute towards better education and wider community development,' said Cairil. The Mangrove Forest Conservation Project is a three-year collaboration with UiTM's Built Environment Faculty, which includes ongoing monitoring of the mangrove forest in the area, soil-carbon stock analysis, and educational workshops with the local community. 'This project gives our employees first-hand knowledge and experience to understand the real impacts of environment degradation. 'Our partnership with UiTM and links through various operating companies create a wide foundation towards engaging and supporting the local community, while contributing meaningfully to the national sustainability agenda,' Cairil added. The project will also be supported by a host of DRB-Hicom subsidiaries such as Bank Muamalat, Proton, EON and DRB-Hicom University of Automotive Malaysia. Also present at the launch were representatives from DRB-Hicom, UiTM Built Environment Faculty and Selangor Forestry Department.
The Star
a day ago
- Business
- The Star
DRB-Hicom's latest buy a win
HLIB) Research said it is positive on the acquisition, as Spirit Malaysia's stable earnings are expected to strengthen DRB-Hicom's overall financial performance. PETALING JAYA: Analysts are cautiously optimistic on DRB-Hicom Bhd 's plans to acquire Spirit AeroSystems Malaysia Sdn Bhd, which is a key customer in the aerospace business. Hong Leong Investment Bank (HLIB) Research said it is positive on the acquisition, as Spirit Malaysia's stable earnings are expected to complement Composites Technology Research Malaysia Sdn Bhd's (CTRM) operations and strengthen DRB-Hicom's overall financial performance. CTRM is a wholly-owned subsidiary of DRB-Hicom. 'The indicative price-to-earnings (PE) valuation stands at seven times, aligning closely with DRB-Hicom's projected PE of 7.4 times for financial year 2026 (FY26) and 5.4 times for FY27. 'The deal is expected to yield a negative goodwill gain of RM223.2mil, while CTRM will eliminate RM12.7mil in profits related to unsold inventory. 'We anticipate an additional earnings contribution of around RM45mil per year – equivalent to approximately 21.5% of FY25 earnings and 15.4% of FY26 earnings,' the research house added. In an announcement to Bursa Malaysia on Monday, the conglomerate said it is paying US$109.8mil or RM491.3mil cash to take over Spirit Malaysia to strengthen its presence in the booming aerospace business, especially with the recent commitment by Malaysia and Indonesia in securing a new Boeing aircraft. The proposed acquisition is expected to be completed by the fourth quarter of 2025 (4Q25), pending shareholders and European and US regulators' approval. 'While we are positive on the acquisition exercise, we maintain our 'hold' recommendation with an unchanged target price of RM0.85,' it said. Meanwhile, Kenanga Research said it is maintaining its 'underperform' call on DRB-Hicom. Among others, it said: 'Our main concern is on the fluctuation of earnings post-takeover as Spirit Malaysia will be detached from the Spirit Group, thus losing fixed-margin arrangement (pre-takeover, it is under a cost-plus arrangement as any cost incurred is charged back with a fixed mark-up to the respective Spirit AeroSystems' entities). 'Post-takeover, Spirit Malaysia will be entering into supply agreements directly with Airbus and Boeing with no cost-plus arrangement,' the brokerage noted. DRB-Hicom reported an 81% decline in net profit in 1Q25 ended March 31, 2025 to RM17.7mil from RM91.5mil in the previous corresponding period. The decline was attributed to reduced revenue across major segments, coupled with higher depreciation and amortisation expenses. Meanwhile, revenue in 1Q25 slipped to RM4.11bil from RM4.33bil a year earlier.
The Star
2 days ago
- Automotive
- The Star
DRB-Hicom shares rise after Spirit Aerosystems Malaysia acquisition plan
KUALA LUMPUR: DRB-Hicom Bhd 's shares edged higher following its proposal to acquire the entire equity interest in Spirit Aerosystems Malaysia Sdn Bhd (Spirit MY). The conglomerate rose 1.84%, or 1.5 sen, to 83 sen at 10.21 am, though it remains down about 25% year-to-date. On Monday, DRB-Hicom said its wholly owned subsidiary, Composites Technology Research Malaysia Sdn Bhd (CTRM), had entered into a conditional share purchase agreement to acquire Spirit MY for a sum to be determined based on an enterprise value of US$95.2mil. Hong Leong Investment Bank Research (HLIB Research) is positive on the acquisition, noting that Spirit MY's stable earnings are expected to complement CTRM's operations and enhance DRB-Hicom's overall financial performance. 'The indicative price-to-earnings (P/E) valuation stands at 7.0x, aligning closely with DRB's projected P/E of 7.4x for FY26 and 5.4x for FY27. 'The deal is expected to yield a negative goodwill gain of RM223.2mil, while CTRM will eliminate RM12.7mil in profits related to unsold inventory,' HLIB Research said. 'We anticipate an additional earnings contribution of around RM45mil per year - equivalent to approximately 21.5% of FY25 earnings and 15.4% of FY26 earnings,' it added. While HLIB Research maintains a positive view on the acquisition, it is keeping its 'hold' recommendation with an unchanged target price of RM0.85, based on a 25% discount to its sum-of-the-parts valuation of RM1.11. 'We remain cautious on DRB's main business segment - automotive, given stiff market competition, while PosM and Deftech remain as drags to the group, partially offset by the steady contributors like Bank Muamalat and CTRM,' it said. Kenanga Research described the acquisition as 'mildly positive,' noting that it should be price-to-earnings (P/E) accretive, with Spirit MY valued at 14 times compared with DRB-Hicom's 16 times. The research house cautioned that there is currently a greater risk as Spirit MY no longer operates under the Spirit Group and, therefore, lacks cost-plus protection. 'We keep our earnings forecasts, target price of RM0.68 and underperform call, pending shareholders and regulators' approval,' it added.
New Straits Times
2 days ago
- Business
- New Straits Times
HLIB keeps HOLD on DRB-Hicom despite positive aerospace deal
KUALA LUMPUR: Hong Leong Investment Bank (HLIB) is maintaining its HOLD call on DRB-Hicom Bhd with an unchanged target price of 85 sen, reflecting a 25 per cent discount to its sum-of-the-parts (SOTP) valuation of RM1.11. While HLIB views the group's latest aerospace acquisition positively, it remains cautious on the automotive segment amid stiff competition, noting continued drag from Pos Malaysia Bhd and defence arm Deftech. These headwinds, however, are partially offset by stable contributions from Bank Muamalat and aerospace subsidiary Composites Technology Research Malaysia Sdn Bhd (CTRM). CTRM has signed a conditional agreement to acquire Spirit AeroSystems Malaysia Sdn Bhd for US$95.2 million (RM446 million) from US-based Spirit AeroSystems, Inc. and Spirit AeroSystems International Holdings, Inc. "We are positive with the acquisition, as Spirit AeroSystems Malaysia's stable earnings are expected to complement CTRM's operations and strengthen DRB-Hicom's overall financial performance," HLIB said in a note. HLIB said the indicative price-to-earnings (P/E) multiple of 7.0x is in line with DRB-Hicom's projected 7.4x for FY2026 and 5.4x for FY2027. "The deal is expected to yield a negative goodwill gain of RM223.2 million, while CTRM will eliminate RM12.7 million in profits related to unsold inventory." The investment bank added that post-acquisition, annual earnings could rise by about RM45 million, equivalent to 21.5 per cent of FY2025 and 15.4 per cent of FY2026 earnings. DRB-Hicom said the acquisition will give CTRM greater scale, technical capabilities, and supply chain leverage, enabling it to compete more aggressively in the global aerospace market while strengthening relationships with major OEMs, including Airbus (A220, A320, A350) and Boeing (737, 787). Spirit AeroSystems Malaysia, based in Subang, produces advanced aerostructures and provides engineering, supply chain, and shared services for Airbus and Boeing programmes. For FY2024, it recorded a pre-tax profit of RM70.1 million and net assets of RM770.5 million. With both Airbus and Boeing projecting rising aircraft deliveries this decade, DRB-Hicom believes the enlarged CTRM will be well-positioned to capture growing aerospace demand, diversify revenue streams, and boost operational efficiency.
The Star
2 days ago
- Business
- The Star
DRB-Hicom plans to acquire Spirit Malaysia
PETALING JAYA: DRB-Hicom Bhd plans to acquire the Malaysian operations of aerospace manufacturer Spirit AeroSystems – the world's largest standalone aerostructures company with an enterprise value of US$95.2mil. In a statement, the conglomerate said its wholly-owned subsidiary, Composites Technology Research Malaysia Sdn Bhd (CTRM) had entered into a conditional share purchase agreement with Spirit AeroSystems Inc and Spirit AeroSystems International Holdings, Inc. The acquisition is expected to be completed by year-end, making Spirit AeroSystems Malaysia Sdn Bhd (Spirit Malaysia) a wholly-owned subsidiary of CTRM. The purchase consideration is set to be fully satisfied in cash, which is expected to be funded through bank borrowings. Based on the latest audited consolidated financial statements for financial year 2024, Spirit Malaysia posted a profit after tax of RM70.1mil and net assets of RM770.5mil. According to DRB-Hicom, the acquisition represents a strategic opportunity to further enhance CTRM's competitive position in the aerospace industry by enhancing its aerostructures expertise. 'This would contribute towards improved scale, efficiency, and growth in various areas that would elevate CTRM's presence in key aerospace programmes,' the company said. The conglomerate added that it would also deepen its relationships with global original equipment manufacturers, while expanding CTRM's relationships with Airbus for its A220, A320, and A350 programmes, and with Boeing on the 737 and 787 programmes. 'At the same time, CTRM will enhance its presence across the supply chain and be better positioned for long-term competitiveness and sustainable growth in an increasingly challenging and dynamic aerospace market,' DRB-Hicom said. CTRM is known for developing and producing aircraft composites components for aerospace and non aerospace applications as well as offering a range of support services such as testing laboratory facilities, composites engineering and supplier management services. Spirit Malaysia supplies key components and other assemblies for Airbus and Boeing marquee programmes, including A220, A320/A321, A350, B737 and B787. In addition to its aerospace composite and metallic assembly expertise, it also provides engineering services, supply chain management services and shared services. Spirit Malaysia is also a key customer of CTRM, contributing 54.1% towards the latter's consolidated revenue for the financial year ended Dec 31, 2024. The acquisition followed news of Boeing receiving regulatory approval from the UK's Competition and Markets Authority for its planned acquisition of Wichita-based Spirit AeroSystems. According to reports, this meant investigations will not continue on to 'phase two'. Initial investigation began in June 2025 and had a deadline for the end of this month. The deal is reportedly expected to be completed in the fourth quarter of this year. At market close yesterday, DRB-Hicom's share price was 82 sen.
