• Maintain Buy (TP: RM0.92). Perak Transit Berhad's (Ptrans) 1QFY24 net profit of RM17.7mn (+16.6% YoY) was in line with both our and consensus expectations, accounting for 23.5% and 24%, respectively. Ptrans's 1QFY24 revenue declined by 5.8% YoY, mainly due to lower contributions from integrated public transportation terminal operations (IPTT). However, Ptrans's net profit increased by 16.6% YoY, mainly due to lower taxation expenses compared to the same period last year. During the period, the group declared a second interim DPS of 0.05sen, translating to 0.8sen YTD (1QFY23: 1.5sen). We maintain our BUY call with new TP to RM0.94 (from RM1.40) reflect the change in the enlarged share base post bonus share issuance with DCF valuation (WACC: 8.75% and TG 1.4%, which implies FY24F EPS of 6.8sen, pegged to a PER of 13.8x), based on our positive outlook on the expected completion of construction for Bidor Sentral.

• Key highlights. In 1QFY24, revenue declined by 5.8% YoY, mainly due to a lower contribution from the project facilitation fee, although revenue increased in other segments driven by i) higher contributions from the Interim Stage Bus Support Fund programme and contracted services, ii) an increase in fuel sales volume and prices, and iii) the completion of more telco towers. Meanwhile, on a QoQ basis, revenue increased by 9.9% due to higher contributions from revenue sharing with logistics tenants. Nevertheless, net profit increased by 2.1%, mainly due to lower deferred tax recognised.

• Earnings Revision. No change to our FY24-26F earnings forecast. However, we reduce FY24-26 EPS and DPS to 6.8-7.7sen and 2.4-2.7sen respectively, to reflect the change in the enlarged share base post-bonus share issuance.

• Outlook. We anticipate a positive outlook driven by i) strong passenger footfall, ii) the completion of Bidor Sentral, scheduled to commence operations in the second half of 2024, with secured tenancies for a clothing store, a bowling alley, and a badminton operator; in addition to TF ValueMart as a key anchor tenant, and iii) secured an orderbook of RM400k for one telco tower, which is expected to be completed in next quarter.

Source: BIMB Securities Research - 24 May 2024