KUALA LUMPUR: Maybank Investment Bank Research is positive over Sime Darby Bhd 's partnership with Porsche to set up the latter's first assembly plant outside of Europe, starting in 2022.Maybank maintains 'buy' call on Sime Darby

       KUALA LUMPUR: Maybank Investment Bank Research is positive over Sime Darby Bhd's partnership with Porsche to set up the latter's first assembly plant outside of Europe, starting in 2022.

       The research house said it was not completely surprised by the development, having highlighted the possibility of a collaboration in a previous report.

       It said Porsche's decision to expand its assembly operations outside of Europe has been exacerbated by the tightening of regulations in the EU, with regards to CO2 emissions and the phasing out of internal combustion engine vehicles by 2035.

       "We posit that the Inokom plant has been identified (Sime has a 53.6% stake) for the contract assembly works (a new facility will likely be constructed specially for this), one or two models will be CKD-ed here, most likely to be the SUVs Cayenne first, and Macan later.

       "These models are arguably the best-selling ones (volume-wise) here, and the CKD-ed models will be the internal combustion engine vehicles (ICEVs)," it said.

       Maybank IB does not rule out Porsche using the Malaysia facility for its Asean/Asia export market in its next growth phase.

       Based on a back-of-envelope calculation, the research house conservatively suggests Sime could add RM2.8bmil per annum net profit from this venture based on 1,000 units and RM5,000 contract assembly margins estimate.

       Maybank IB maintained its "buy" call and sum-of-parts target price of RM2.70 on the counter.