Review

• Perak Transit’s (Ptrans) 1H23 core profit of RM31.2mn was in line with expectations. The company declared a third interim dividend of 0.75sen/share for FY23 which will go ex-dividend on 26 October 2023.

• 1H23 revenue and adjusted PBT surged 7.4% and 4.7% YoY respectively to RM88.9mn and RM41.6mn. The decent performance was underpinned by a robust earnings growth at the integrated public transportation terminal (IPTT) segment that helped mitigating the cost pressure. Note that the finance cost increased by a whopping 46.1% YoY to RM6.7mn in 1H23 mainly due to drawdown of RM250mn Sukuk financing in 1Q23.

• QoQ, 2Q23 adjusted PBT contracted by 6.6% to RM20.1mn on the back of 12.3% drop in revenue. However, the core profit rose 5.5% to RM16.0mn due to normalisation of effected tax rate to 20.2% in 2Q23 from 29.4% in the preceding quarter.

Impact

• No change to our FY23-25 earnings projections, pending management guidance at an analyst briefing today.

Outlook

• Previously, management guided that Bidor Sentral is expected to receive the certificate of completion and compliance, and tenants could start moving in early-24. We project this new terminal would generate revenue and EBIT of RM16.0mn and RM11.3mn respectively in FY24 based on a conservative 50% occupancy rate assumption. Note that the company has secured an anchor tenant namely TF Value Mart to lease 52,000 sf (20% of NLA) for its supermarket operations. Importantly, we do not see difficulties in getting new tenants after the economic reopening.

Valuation

• We maintain Ptrans’ SOP valuation at RM1.55/share (see Figure 1). Maintain Buy

Source: TA Research - 17 Aug 2023