Review

• Perak Transit’s (Ptrans) 1H24 core profit of RM35.4mn was in line with ours and consensus estimates at 51% and 48% of full-year forecast respectively. The company declared a third interim dividend of 0.5sen/share, which will go the ex-dividend on 29 Oct 2024.

• 1H24 core profit rose 13.4% YoY to RM35.4mn, which driven mainly by increase in revenue from terminal operations (IPTT) and reduction in tax expense. For this period, the revenue from IPTT surged 1.7% YoY to RM60.7mn while the tax expense reduced by 23.1% YoY to RM8mn.

• QoQ, 2Q24 adjusted PBT grew by a meagre 1.6% to RM21.9mn on the back of increased rental revenue which more than offset sharp rises in operating expenses. The growth in rental revenue can be attributed to additional rentals emanated from commencement of a new ballroom, furniture and renovation shops at Kampar Putra Sentral (KPS) in Apr-24 as well as new supermarkets at Terminal Meru Raya and KPS in June-24.

Impact

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

Outlook

• Recently, the company has received the certificate of completion and compliance for operations of Bidor Sentral, comprising bus terminal, supermarket, shops, convention centre, badminton courts and bowling centre. 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 RM1.03/share (see Figure 1). Maintain Buy

Source: TA Research - 20 Aug 2024