Review

• Perak Transit’s (Ptrans) 1Q24 core profit of RM17.7mn was in line with expectations at 26% of our full-year forecast and 24% of consensus estimate. The company declared a second interim dividend of 0.5sen/share for FY24.

• 1Q24 core profit rose 16.5% YoY to RM17.7mn mainly driven by lower tax expense, which fell 39.5% YoY to RM3.8mn. The lower effective tax rate of 17.8% was due to lower deferred tax recognition. For this quarter, the revenue declined 5.8% YoY to RM44.6mn underpinned by lower project facilitation fee.

• QoQ, 1Q24 adjusted PBT rose 14.1% to RM21.5mn on the back of 9.9% rise in revenue. The decent performance was due to higher profit sharing from logistic tenants in this quarter.

Impact

• No change to our FY24-26 earnings projections, pending management guidance at an analyst briefing today.

Outlook

• Previously, management guided that Bidor Sentral is expected to commence operations in mid-2024, targeting an occupancy rate of 70%. Meanwhile, the development of a new Tronoh Sentral would likely begin this year after the submission of development order to the authority. These two projects are expected to fuel Ptrans’ future earnings growth.

Valuation

• We maintain Ptrans’ SOP valuation at RM103/share (see Figure 1). Maintain Buy

Source: TA Research - 24 May 2024