PETALING JAYA: Analysts believe that the potential outlook catalysts for bus operator HI Mobility Bhd
include the award of the expanded Johor Stage Bus Service Transformation (SBST) programme and Prasarana contracts, rising cross-border traffic, and a higher dividend payout.
CIMB Research said in a note that feeder and dispersal routes for the upcoming Johor-Singapore Rapid Transit System (RTS) Link will likely be incorporated into the expanded BAS.MY programme in Johor.
To recap, HI Mobility was awarded a five-year contract worth RM282.5mil to operate Johor Baru’s SBST network from March 2022 to March 2027, covering 21 routes across six local councils with 162 buses.
“We estimate the upcoming SBST contract renewal could represent a two to three times increase in both contract value and fleet size, supported by the requirements introduced by the RTS Link and a fleet of nearly 300 buses,” it said.
The expanded programme is also likely to feature a larger proportion of electric buses or EVs to reduce the government’s longer-term public transportation costs, CIMB Research said.
The research house views this positively, as EV adoption could reduce direct operating costs by up to 70% through lower fuel, maintenance, and repair expenses.
CIMB Research noted that HI Mobility’s share price had fallen by 21% in the two months since June 16, which it attributes mainly to the delay in the award of the RTS dispersal bus contract.
The group previously expected the contract to be awarded by late second quarter of this year.
However, the research house said it does not expect the delay to have a material near-term earnings impact, as its forecasts had yet to factor in any contribution from the RTS Link routes.
At last look, the stock stood at RM1.80.
