Perak Transit (PTB) announced that it has received the first phase of Certificate of Completion and Compliance (CCC) approval for its Terminal Kampar’s Ground Floor operations i.e. bus terminal and hotel lobby. Meanwhile, the approval for the 2nd phase of the terminal i.e. the mall and hotel operation is only expected to be received by 3Q19. This came in slightly later than expected. Earlier, both phases were anticipated to receive CCC approval in 1Q19 and 2Q19 respectively. We adjust our forecast numbers by c.5% as we were guided a higher rental rate for Terminal Kampar than our earlier assumptions. Our Outperform call is retained, but at a higher target price of RM0.43 (previously RM0.42) based on DCF-based valuations, as we also roll-over our valuation to FY20F. PTB is currently trading at 8x FY19F.

• Update on Terminal Kampar. To recap, Terminal Kampar is an 8-storey bus terminal with a 10-storey hotel and has a gross leasable area of c.408k sqft (i.e. 8 times bigger than Terminal AmanJaya). Concept of the terminal will be centred on food and beverages (F&B) services, with a supermarket, hotel, cinema and bowling alley as its anchor tenants. The main revenue income from Terminal Kampar will be from the rental of advertising and promotional spaces as well as rental from the shops and hotel operations. We understand that PTB expects the rental rate to be c.RM4 per sf, with its anchor tenant occupying at least 70% of the terminal.

Source: PublicInvest Research - 9 May 2019