DJ MARKET TALK: CIMB Ups Proton To Trading Buy, Ups Target 61.5%
0218 GMT [Dow Jones] STOCK CALL: CIMB Research upgrades Proton (5304.KU) to Trading Buy from Neutral, raises target to MYR5.25 from MYR3.25 after rolling investment horizon to end-2010, assuming higher P/NTA multiple of 0.57X vs previous 0.35X previously. Follows news Proton in talks with VW on technical collaboration. "We view the potential technical collaboration with VW positively as it should help Proton boost its competitive edge," says CIMB; also doesn't rule out possibility could lead to VW taking an equity stake in Proton as per original intention. "If this partnership pans out, Proton's spare capacity would be used for the assembly of VW vehicles, thereby helping to absorb Proton's current spare capacity," says CIMB; adds, with VW as a partner, confidence in Proton's long-term sustainability could be restored, could also boost consumer confidence in Proton given VW's reputation. Stock last +1.4% MYR3.76. (ECH)