Success story: People queuing up to buy bus tickets at Terminal Amanjaya in Ipoh. PTB, which underwent IPO in November last year, is known for its success in running the terminal
PETALING JAYA : Affin Hwang Capital Research has maintained its “buy” call on Perak Transit Bhd (PTB) with a 31 sen target price following PTB’s proposed acquisition of two parcels of land which the research firm said will boost the company’s growth prospects.
In a note, Affin highlighted the strategic location of the two land plots which will be used for the construction of an integrated bus terminal complex and petrol station, subject to the apoproval of regulatory authorities.
PTB, which underwent an initial public offering in November last year, is known for its success in running the Terminal AmanJaya in Ipoh, Perak.
With the new acquisitions, the group is set to replicate its terminal business in other parts of the state, said Affin.
“The combined land size of the proposed acquisition is approximately 67,100 square meters, which is more than twice the land size of Terminal Amanjaya,” it said.
As a result, it is likely that the future terminal in Tronoh will be larger than the current terminal in Ipoh and could possibly encompass a commercial hub, it added.
PTB announced on Tuesday that its 99.98%-owned subsidiary The Combined Bus Services had entered into a sale and purchase agreement with Pasti Kenari Sdn Bhd for the two land parcels at a purchase consideration of RM7.97mil.
According to the group, the purchase price is at a considerable discount to the actual market value as reported by an independent registered valuer.
The two plots of land are located in Tronoh, Perak along the Ipoh-Lumut highway.
The parcels are also located near Universiti Teknologi Petronas as well as the upcoming SEGi University College, Affin said.
“As the acquisition will be financed entirely via internally generated funds, there will be no impact to the group’s gearing level.
“We think the construction of this new terminal might commence after the completion of their second terminal in Kampar by 2018 and will be a future growth catalyst for the stock,” the research house said, adding that PTB’s growth pipeline looks fairly visible while at the same time its current valuations are attractive for a monopolistic type of business.
PTB’s share have made considerable gains since the turn of the year prior to the announcement.
The stock closed unchanged at 26.5 sen yesterday, representing a 65% increase to date.
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