HI Mobility's 1QFY27 core PAT came in at RM15.7m (+25.8% YoY, +3.8% QoQ). After adjusting for forex loss and gain on disposal of investment properties, the results came in within both our and consensus expectations.
The Group declared a first interim single-tier dividend of 1.0 sen/share (1QFY26: 2.22 sen/share), payable on 3 Aug 2026 with an ex-date of 14 Jul 2026.
Earnings growth was supported by continued strength in the scheduled bus segment, resilient cross-border ridership and the maiden contribution from the vehicle assembly and distribution business following the completion of the Acacia and HBCM acquisitions.
We remain positive on the Group's medium-term outlook, underpinned by its RM255.0m unbilled orderbook, resilient cross-border demand, structural catalysts from the JS-SEZ and RTS Link.
Maintain BUY with a lower TP of RM2.62 (previous: RM2.73), based on a 14.0x FY28F P/E applied to our revised FY28F core EPS of 18.7sen. The lower TP reflects the enlarged share base following the completion of the Acacia and HBCM acquisitions.
Within our expectations. After adjusting for forex loss (+RM0.645m) and gain on disposal of investment properties (-RM0.02m). HI Mobility posted 1QFY27 core PAT of RM15.7m (+25.08% YoY, +3.8% QoQ) came within ours and consensus expectations, accounting for 22% of full-year.
Dividend. HI Mobility declared a first interim single-tier dividend of 1.0sen/share for FY27 (1QFY26: 2.22sen/share), payable on 3 Aug 2026, with an ex-date of 14 Jul 2026.
QoQ. Revenue grew 35.3% QoQ to RM111.5m (4QFY26: RM82.4m), mainly driven by the consolidation of the newly acquired vehicle assembly and distribution business following the completion of the Acacia and HBCM acquisitions in April 2026. This more than offset the seasonally stronger demand typically seen in 4QFY26. Core PAT increased 3.8% QoQ to RM15.7m (4QFY26: RM15.1m), primarily due to the absence of mobilisation costs incurred in the preceding quarter for the Stage Bus Service Transformation (SBST) Johor Bahru contract.
YoY. Revenue surged 51.2% YoY to RM111.5m (3MFY26: RM73.8m), driven by continued demand for the Group's scheduled bus services, higher cross-border ridership and the maiden contribution from the vehicle assembly and distribution segment following the Acacia and HBCM acquisitions. Core PAT rose 25.8% YoY to RM15.7m (3MFY26: RM12.5m), supported by stronger operating performance and higher interest income from short-term fund placements, partially offset by higher direct operating costs, administrative expenses and finance costs associated with the enlarged group.
Outlook. We remain positive on HI Mobility's outlook, underpinned by resilient demand for its scheduled bus operations and sustained cross-border commuter traffic between Johor and Singapore. We continue to view the Johor-Singapore Special Economic Zone (JS-SEZ) and the upcoming RTS Link as structural growth catalysts, which are expected to drive higher cross-border commuter volumes and first- and last-mile ridership over the medium term. In addition, the Group's RM255.0m unbilled orderbook provides healthy earnings visibility, supported by recurring government-linked contracts, while the full-year contribution from the recently acquired Acacia and HBCM businesses should further diversify its earnings base. Together with the ongoing fleet expansion and Sabah rollout, we believe the Group remains well-positioned to deliver sustainable earnings growth over the medium term.
Earnings revision. No changes to our earnings forecasts at this juncture. We maintain our FY27F and FY28F net profit projections as results are tracking within our estimates.
Valuation. We maintain our BUY recommendation but lower our target price to RM2.62 (previous: RM2.73), based on an unchanged 14.0x FY28F P/E applied to our revised FY28F core EPS of 18.7 sen (previous: 19.5 sen). The lower target price is solely attributable to EPS dilution following the enlarged share base after the Acacia and HBCM acquisitions, rather than any deterioration in the Group's fundamentals. We believe a 14.0x P/E remains justified, representing a premium to domestic transport peers given HI Mobility's stronger medium-term earnings growth, improving earnings diversification following the acquisitions, recurring cash flows from regulated bus operations and long-term structural growth catalysts from the JS-SEZ and RTS Link. Nevertheless, we maintain a discount to the Bursa Malaysia Transportation Index's three-year average of 16.6x to reflect the ongoing integration risks associated with the newly acquired businesses.
Risks. Key risks include weaker cross-border commuter demand, delays in government contract awards, and higher-than-expected operating costs.
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| Currency | Buy Rates (RM) | Sell Rates (RM) |
|---|---|---|
| USD | 4.052911 | 4.085350 |
| EUR | 4.637463 | 4.642299 |
| CNY | 0.598280 | 0.598896 |
| HKD | 0.517003 | 0.520660 |
| SGD | 3.134282 | 3.156359 |