• Maintain BUY (TP: RM0.96). Perak Transit Berhad's (PTrans) 1HFY24 net profit of RM35.4mn (+13.4% YoY) was in line with both our and consensus expectations, accounting for 47% and 48%, respectively. PTrans's 2QFY24 revenue and net profit increased by 13.8% YoY and 10.5% YoY, mainly dueto higher rental and revenue sharing contribution potentially from Kampar Putra Sentral tenants. During the period, the group declared a third interim DPS of 0.5sen, bringing the YTD to 1.75sen (YTD23: 2.25sen). We maintain our BUY call with new TP to RM0.96 (from RM0.94) as we roll forward our valuation base year to FY25F. Our valuation is based on the DCF valuation (WACC: 8.75%, TG: 1.4%), which implies 12.6x FY25F P/E.
• Key highlights. In 2QFY24, revenue increased by 13.8% YoY due to (i) higher contributions integrated public transportation terminal (IPTT) operation, ii) higher contributions from Interim Stage Bus Support Fund program, reflecting increased usage of buses for work, business, and daily needs, iii) an increase in fuel sales volume and prices, especially for RON97 and diesel, and iv) more progress claims made for completed telco towers. Meanwhile, on a QoQ basis, revenue and net profit increased by 5.9% and 0.1%, respectively, due to, higher rental and revenue sharing contribution from the logistic tenants.
• Earnings Revision. No change to our FY24-26F earnings forecast.
• Outlook. We maintain a positive outlook on the company, underpinned by several key catalysts: i) robust passenger footfall growth, driven by the normalization of travel behaviour post-pandemic and boost in tourism activities, ii) the successful completion and receipt of the Certificate of Completion and Compliance (CCC) for Bidor Sentral obtained on 9th Aug 2024, and iii) the anticipated commencement of construction for Terminal Seri Iskandar in 2HFY2024, with a targeted completion by the end of 2026.

Source: BIMB Securities Research - 20 Aug 2024