Review

• Perak Transit’s (Ptrans) 9M23 core profit of RM47.8mn was in line with our expectation but below consensus estimate. The company declared a fourth interim dividend of 0.75sen/share, bringing the total FY23 dividend to 3sen/share.

• 9M23 core profit rose 8.2% YoY to RM47.8mn, underpinned by higher revenue and lower effective tax rate. The higher revenue, up 3.2% YoY, came mainly from the integrated public transportation terminal segment, which helped to ease some cost pressures especially the whopping 34.1% YoY rise in finance cost. Meanwhile, the effective tax rate normalised to 23.4% for 9M23 versus 30.1% a year ago.

• QoQ, 3Q23 adjusted PBT grew 3.6% to RM20.8mn on the back of 5.1% increase in revenue. PBT margin was stable at 48%. In terms of financial leverage, 3Q23 net gearing climbed higher to 0.65x from 0.5x a year ago due to additional borrowings to finance the construction of Bidor Sentral.

Impact

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

Outlook

• Previously, management guided the construction of Bidor Sentral would be completed this year and the company is confident of securing an occupancy rate of 70% in 2024. Meanwhile, for Tronoh Sentral development, the construction would likely begin in 2024 after securing the development orders. Note that the project financing for Tronoh Sentral estimated at RM300mn has already been secured.

Valuation

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

Source: TA Research - 16 Nov 2023