TA Research maintained its 2024 to 2026 earnings projections for the company.
PETALING JAYA: The outlook for Perak Transit Bhd
remains positive, with growth expected to be sustained by its strategic expansion plans.According to BIMB Research, the expected commencement of SVETOFOR grocery store as a new tenant at the company’s bus terminals next month will drive higher foot traffic.
Other key growth catalysts for Perak Transit include the anticipated construction of Tronoh Sentral in the second half of this year, with completion targeted by end-2026, as well as an upcoming project to develop a new bus terminal in Kota Bharu in Kelantan, the brokerage wrote in its report yesterday.
Perak Transit posted a net profit of RM17.7mil for the third quarter ended Sept 30, 2024 (3Q24), up from RM16.6mil in the previous corresponding period, and its revenue rose to RM52.1mil in 3Q24 from RM43.7mil.
For the nine-month period of 2024 (9M24), Perak Transit’s net profit stood at RM53.1mil, as compared to RM47.8mil in 9M23, while revenue was higher at RM144mil versus RM132.6mil.
BIMB Research said the results were in line with its expectations, as well as that of consensus, at 70% and 72%.
The brokerage maintained its “buy” call on Perak Transit, with a lower target price of 93 sen, compared with 96 sen previously, after revising down its 2024 to 2026 earnings forecasts for the company to impute a higher effective tax rate on its finances.
BIMB Research noted that Perak Transit’s net profit growth was sluggish at 0.2% on a quarter-on-quarter basis due to a higher effective tax rate of 23%, compared with 19% in 2Q24.
Perak Transit saw more robust growth year-on-year in 3Q24, due to, among other things, higher progress claims for completed telecommunication tower projects, reflecting increased infrastructure deployment; stronger revenue from project facilitation fees, rental income, and revenue-sharing arrangements with tenants; increased contributions from public transportation, specifically bus fares and contracted services; and higher fuel prices, particularly diesel.
Meanwhile, TA Research kept its target price for Perak Transit at RM1.03, with a “buy” call.
The brokerage noted that the company had recently obtained a letter of award from Pejabatan Setiausaha Kerajaan Negeri Kelantan in regards to the proposal for the implementation of the Terminal Kora Baru Sentral development project.
Perak Transit was expected to appoint China Communications Construction Co as the main contractor for the project.
“We have not factored in this new development as information remains sketchy at this moment,” TA Research explained.
The brokerage said Perak Transit’s results were in line with its expectations. It maintained its 2024 to 2026 earnings projections for the company, pending management guidance. For the quarter in review, Perak Transit declared a fourth interim dividend of five sen per share, bringing the total 2024 dividend to RM2.25.
