• Maintain Buy (TP: RM1.40). Perak Transit Berhad (PTRANS) achieved a net profit of RM65.1mn (+5.1% YoY) for full year FY23 that is within both our and consensus expectations, accounting for 105% and 97% respectively. PTRANS FY23 recorded a 1.3% YoY increased in revenue, driven by higher contribution from integrated public transportation and communication telco construction operation. The group declared a first interim dividend of 0.75sen per ordinary share. We maintain our BUY call with new TP to RM1.40 (from RM1.35) based on DCF valuation (WACC: 8.75% and TG upgraded to 1.4% from 1%), which implies a PER of 13.5x pegged to FY24F EPS of 10.3sen. We think this is fair considering positive outlook on the completion of construction for Bidor Sentral.

• Key highlights. PTRANS’s 4QFY23 revenue and net profit increased by +1.3% YoY and 5.1% YoY, respectively, driven by i) higher contribution from integrated public transportation terminal operations segment, particularly from project facilitation fee, ii) increase contributions from the Interim Stage Bus Support Fund programme and contracted services, and iii) more telco towers being secured and completed with five towers already completed and four ongoing projects. Meanwhile, on a QoQ basis, revenue decline by -7.0% due to the reduced contributions from revenue sharing with logistic tenants. Nevertheless, net profit increase by +4.2% attributed to the reversal of deferred tax related to property, plant, and equipment.

• Earnings Revision. No change to our FY24-26F earnings forecast.

• Outlook. We anticipated a positive outlook driven by i) robust passenger footfall resulting from the normalisation of travelling behaviour postpandemic, ii) anticipated commencement of bowling and go-kart operations at Kampar Putra Sentral in Jan24, expected to boost occupancy rates, iii) the completion of Bidor Sentral, scheduled commence operations in the second half of 2024.

Source: BIMB Securities Research - 23 Feb 2024