Wednesday, November 21, 2007

Lulu Wonders, If Proton HAS Turned Around, Why Then Did The Share Tumble?

The papers, both local and foreign, are reporting that Second Finance Minister Tan Sri Nor Mohamed Yakcop said there would be no foreign partner for Proton for the time being as the national car manufacturer was showing signs of a turnaround.

Kononnya, when Khazanah started negotiations in December 2006, Proton was in dire straits and urgently required a foreign partner.
The situation has now changed with Proton "starting to make money again" and expected to return to profit by 2009.

The indicators of the turnaround are:
- Proton’s market share has increased from 22% to 31%;
- Increased export orders from China, Iran, Indonesia and Thailand;
- Number of dealers reduced from 362 in March to 304;
- Closer cooperation with Lotus to ensure technology was transferred to Proton vehicles;
- Sales have increased with 21,580 bookings in the past three months; and
- Reduction of inventory by 50% from three months to about a month.
- Proton's Consumer Satisfaction Index had risen to 713 points from 677 points last year
- Saga replacement model would be launched in February and a seven-seater MPV in January 2009.

Nor Mohamed said the turnaround at Proton was such that the earlier thinking that it needed a foreign partner to stay afloat was no longer valid.

hmm... it sounds so rosy and all that.
But Lulu's confused.
Why then, Lulu's wondering, did the Proton Share tumble?
Why did CIMB Investment bank CIMB cut its target price on shares in Malaysian car-maker Proton Holdings to 3.50 ringgit after the government abruptly ended talks with Germany's Volkswagen over an alliance?
Could it be cos they tak 'caya our Second Finance Minister Tan Sri Nor Mohamed Yakcop?

updates Proton shares closed at Rm4.02, a 92sen drop from previous day.

14 comments:

denzook said...

shake head, how many times proton has snubbed VW. First say don want, then want. now they say don want. is like playing with VW like that. If i'm VW, next time they come to beg me, I malas layan them unless they dish out great deal like they deal with french submarine and sukhoi.

kaki.ayam said...

no finance background, but yet would like to comment that I never take those advise from finance consultants seriously. ..

from my ignorant point of view, i guess the main reason for the drop was because many were expecting the talk to bear fruit, as such were keeping/buying the shares for investment purposes.

personally, i kind of believe the increase in orders, especially for the persona. I am no fan of Proton, both it's employees and the cars it produces. But the persona impresses me. Of course the performance of the engine are yet to be evaluated.

carboncopy said...

It is turning around because it is entering into a very niche market with its "Islamic car".

I am serious :P

Anonymous said...

Try imagining those speculators who have bought proton shares after reading that piece of crap business news in the Edge and Bloomberg channel which reported on a favorable conclusion to the talks. My own Bursa investment 101...buy or sell to the opposite of syndicated news. Buy counters when bloggers are up 'in-arm' against it. Hehehe.

ps: Notice you took down that "Hello...IP...". Good 'cos it is a bit daunting for me. w9

Anonymous said...

My personal interpretation when I read the news this morning: VW gave Proton the old 2 finger salute when Proton + other interested parties (or in biz lingo "Stakeholders") try to ride roughshod over VW. So to save Proton's face we announce to the world that we Proton have decided not to continue pursuing a working relation with VW.

Billy said...

Typical UMNO mentality. When they are in dire straits, they will try to solicit aid from any Tom, Dick and Harry; and when they find themselves now in a better position, they will tell these parties to go and fly kite, jump in the lake, or whatever. Honestly, PROTON is heading for a dive, and soon. This time, don't expect people like VW to throw you a lifeline.

Anonymous said...

with all the garblement flip-flop decisions, rampant corruptions, judiciary scandals, incompetent agencies etc...

couple with the dubai-based operator scramble out of pkfz & singaporeans shies away from sjer.

guess its only logical for vm to pulls out...

Anonymous said...

walau eh looks like the end is really near ( nearer lah )

Anonymous said...

Congratulation, you are the early bird in the above observation. By now, Malaysian Time 11pm, there is more than 100 news articles on the collapse of Proton share and that pathetic excuse 'but we are doing very well'. There was even a tacit reply by our SPM "We will not bail out Proton..." blah, blah...as if I believe him. w9

Anonymous said...

why dont we just keep quiet and see how proton performs by ist half of 2008. hope the governemnt wont gve any damn excuses like recession in US if proton doesnt perform and has to sell it for I euro ( just like the sugusta sale). and someone can flip that for millions just like the augusta deal.

Anonymous said...

The UMNO led BN government should diversify Proton into a chain of mamak stores.

kaki.ayam said...

let us wait for another 6 months to evaluate the proton persona engine performance...and most important the fuel consumption...if it performs well and within expectation, i guess, this will be proton saving model...

with the kind of economy we are having now, do not be surprise that malaysians will flock back to proton to buy a cheap but functional car...

Anonymous said...

Just a quick comment.

Up to 2 mths ago, was working for a vendor company to Proton. So I get to hear juicy gossips from the few "non-hallucinating who's not into kidding themselves" employees. Anyway, here's the inside track in point form. You draw your own conclusions from it.

TURNOVER VOLUME:
Proton's marketing division has standing instructions from management to try to turn over 10,000 units per month nationwide. This is to ensure that they are able to stay afloat. So in securing ony 21,580 orders over the last quarter (which works out to slightly over 7k orders per month), this only means that their operational expenditure could only survive the shortfall with a subsidy injection from somewhere else (guess who?). Unofficially, it's an open secret within Proton that they currently run at a loss of between RM80m ~ RM100m per month.

VW & GM's WITHDRAWAL:
As far as the inside track is concerned, the foreign partners walked away from negotiations coz Khazanah (a.k.a. government) was unwilling to give up controlling stake of Proton.

CLOSING:
Those jokers (who were actually appointed there by the PM's pariah son-in-law) actually fantasized about being able to persuade foreigners into investing in a loss making company without having to give up overall control of the operations. Yah, right! Mat sallehs got no brains one. :D

Anonymous said...

The fact that the Iswara Saga(offer) helped boost sales is not emphasized. That is a testament to how the car market screwed itself because of overpricing because of protectionism for Proton and other local makers.

btw, The Saga replacement model is so blardy ugly!

~wits0~