KUALA LUMPUR: MIDF Amanah Investment Bank Bhd has revised upwards its net profit forecast for Proton Holdings Bhd by 51% to RM277.3 million in current financial year ending March 2010 (FY10), following the release of Proton's second quarter financials yesterday.

The net profit estimate upgrade, based on Proton's higher sales and earnings before interest and tax margin, also has prompted MIDF to raised its fair value for Proton shares to RM5 from RM4.85 with a Buy call.

"Going forward, we expect sales to be sustainable at the current rate with seasonal softening towards the year end.  

"Impact from the new Perodua MPV is not expected to be severe," MIDF analyst Wan Azhar Mustapha wrote in note to clients today.

Wan Azhar said the new target price of RM5 for Proton shares was based on 0.5 times price-to-book ratio and a price-to-earnings ratio of 6.4 times FY10 earnings.

Interest in the stock is expected to pick up in the near term by virtue of speculation that Proton may rope in a strategic partner, according to MIDF.