KUALA LUMPUR: PublicInvest Research maintained its outperform call on Perak Transit Bhd
following the release of its earnings results, which exceeded expectations.
The research house lowered its target price to 42 sen from 51 sen previously after adjusting for the private placement exercise that was completed on July 25, 2018.
The research house said Perak Transit's half yearly results beat its and consensus expectations at 61% and 71% of full year forecasts respectively.
"During the quarter, it reported higher project facilitation fee, hence raising its pre-tax profit by 13% YoY to RM10.2m. For 1H18, pre-tax profit declined by 9% YoY to RM15.9m due to an increase in fuel prices. However, it was within expectations at 47% of our full year estimates.
"Overall, its net profit was cushioned by its deferred tax income due to the utilisation of the investment allowance, bringing its net profit to RM18.6m, +35% YoY."
PublicInvest said the growth driver is expected to come from the new Terminal Kamapar, which will be completed by end of FY18 and expansion of gross building area at Terminal AmanJaya.
It said Perak Transit also plans to develop new integrated terminal operations in Bidor and Tronoh, of which the approvals for the constructions have yet to be obtained from the relevant authorities.
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