| Key Information Summary | |
|---|---|
| Investment Bank | TA SECURITIES |
| TP (Target Price) | RM0.46 (+58.6%) |
| Last Traded | RM0.29 |
| Recommendation | |
TA Securities has maintained its “Buy” recommendation for the company, alongside an unchanged target price of RM0.46. This positive outlook is primarily underpinned by the company’s recent strategic financial and operational initiatives, which are seen as strong testaments to its sound long-term fundamentals.
Strategic Financing Initiatives
The company recently established a new RM1.5 billion nominal value Sukuk Wakalah program. Maybank Investment has been appointed as the principal adviser, lead arranger, and facility agent for this program. The proceeds from the Sukuk are intended for several key purposes, including the refinancing of existing and future Shariah-compliant financings, funding capital expenditure and working capital requirements, and covering general corporate purposes. It will also finance the minimum required balance in the Shariah-compliant finance service reserve account and defray establishment-related fees and expenses.
Prior to this, the company had already launched a RM500 million Sukuk Murabahah in 2019 and a RM1.5 billion Sukuk Wakalah in 2024. As of September 30, 2025, its outstanding Sukuk stood at RM685 million, with only RM84.5 million repayable over the next 12 months at an average profit rate of 5.14%, benchmarked against the 1-month KLIBOR. While TA Securities remains neutral on the establishment of this new Sukuk program, it views the initiative as a strong affirmation of the company’s robust financial health and long-term prospects, despite recent share price movements.
Operational Expansion
In an operational expansion, the group announced that it has received a letter from Majlis Daerah Tanjong Malim, indicating the council’s principal agreement to collaborate on managing Terminal Bas Tanjong Malim. This collaboration involves a specified monthly rental payment over a period of thirty years. Although detailed information regarding the negotiation is still limited, it is anticipated that the company will incur capital expenditure for refurbishment or expansion of the terminal, operating expenditure for day-to-day operations, and will generate revenue from fees collected from express bus operators and income from the rental of shops and kiosks. TA Securities is mildly positive about this potential new terminal, expecting it to contribute additional revenue to the group, albeit incrementally.
Outlook and Recommendation
Despite these significant developments, TA Securities has made no changes to its FY25 and FY27 earnings projections. The maintained target price of RM0.46 is based on a 1x distressed Net Tangible Asset (NTA) valuation, incorporating an unchanged 3% ESG discount. The “Buy” recommendation is reiterated, reflecting confidence in the company’s underlying value and strategic direction.
