We like PTRANS for its: i) proven track record in the niche and only gazetted integrated public transportation terminal in Ipoh; ii) earnings growth led by the Kampar Terminal (to be completed by end Dec/early Jan) and long term terminal expansion plans to Bidor and Tapah. Meanwhile, its plan to migrate into Main Market is still pending SC approval, which we believe will provide PTRANS access to a wider pool of institutional investors. Valuation is undemanding at 9.5x FY19 P/E (13.6% below average 11x since listing), supported by a strong 13% FY18-20 EPS CAGR.

The only gazetted bus terminal in Ipoh. Listed in Oct 2016, PTRANS owns and operates a strategic transportation hub ie. Amanjaya Terminal (operated since 2012 and the only gazetted bus terminal) and complementary bus and petrol stations in Ipoh. Its main revenue drivers consist of: (i) The Integrated Public Transportation Terminal (IPTT) which makes up about 75-80% of gross profit due to its high margins of ~80%, followed by (ii) Public Bus Services (~15-18% of gross profit ), and (iii) Petrol Station Operations (~2- 3% of gross profit).

Poised for a triangle breakout. PTRANS has been holding up well above the LT support trendline since Apr 2017. A decisive breakout above immediate resistance of downtrend line resistance at RM0.275 will increase the likelihood of the resumption of further advance towards RM0.30 and our LT objective of RM0.315 (52w high). Meanwhile, key supports are situated at RM0.255 (support trendline) and RM0.25 (monthly low). Cut loss at RM0.245.

Source: Hong Leong Investment Bank Research - 26 Nov 2018