Perak Transit (PTB) reported a net profit of RM12.7m for 4QFY21 (YoY: - 3.8%, QoQ: -7.0%), bringing its FY21 to RM53.2m. This was in-line with our and consensus full-year forecast at 100% and 99.8% respectively. The lower earnings was due to the absence of project facilitation fee in the current quarter. Management also guided a lower project facilitation fee for FY22F, though we expect the shortfall to be offset by higher revenue from terminals’ rental income as footfall traffic recovers and contribution from the newly acquired logistic tenants in Sept 2021. We maintain our forecast and retain our Trading Buy call on PTB with unchanged target price of RM1.16 based on DCF-valuation. PTB declared first interim dividend of 0.8 sen per share for FY22.

• 4QFY21 Revenue (YoY: -6.6%, QoQ: -6.5%). PTB reported lower revenue of RM32.9m in 4QFY21 mainly due to no project facilitation fee (PFF) recorded in the current quarter, partly offset by higher bus operations and petrol station operations. For the full-year FY21, revenue increased by 16.1% to RM138.6m, mainly due to contribution of rental income from logistic tenants which commenced in Sep 2021 and leasing of advertising and promotional spaces as well as higher petrol station operations due to higher fuel price.

• 4QFY21 Net profit (YoY: -3.8%, QoQ: -7.0%). Pre-tax profit for 4QFY21 fell 23.5% YoY to RM13.5m mainly due to lower contribution from the integrated public transportation terminal (IPTT) operations as no PFF recorded in the current quarter. Net profit for 4Q however only decreased by 3.8% YoY to RM12.7m due to lower tax rate at 5.9% for the quarter due to additional claim of investment allowance generated from Approved Service Project Status offset against taxable profit. For full-year FY21, net profit grew by 27% YoY to RM53.2m amid higher contribution and earnings from IPTT operations.

• Outlook. We expect the Group’s earnings growth trajectory to resume as footfalls traffic for terminals recover. The Group’s strategy to transform some commercial areas in its terminals into a logistic hub has gained tractions. Logistic tenants have started to contribute around RM2.5m to RM3.0m per month since Sept 2021. For terminal management services (TMS) operations, Terminal Bas Shahab Perdana (Alor Setar) renovation works expect to be completed in 1st half of 2022 and commence operation in 2nd half of 2022. Management is targeting to secure four TMS contracts in 2022 with Capex less then RM10m. On the Group’s long-term growth, it's underpinned by 2 new bus terminals in Perak, namely Bidor Sentral and Terminal Tronoh. The construction of Bidor Sentral started in 2021 and expect to be completed by 2023. Whereas for Terminal Tronoh, construction will commence in 2023.

Source: PublicInvest Research - 23 Feb 2022