Hi Mobility Berhad - Resilient Operations Support Earnings Growth
Wed, 30-Sep-2026 06:48 am
by Wong Kai Heng • Apex Research

Counter

HI (5335)

Target Price (RM)

2.38

Recommendation

Buy

·   HI Mobility’s 2QFY27 CNP came in at RM16.6m (-1.6% YoY, +5.6% QoQ), while 6MFY27 CNP accounted for 44% of our FY27F estimate and 43% of market consensus. We deem the results to be in line with our expectations, as we expect stronger 2HFY27 earnings on seasonally higher travel demand and the ramp-up of domestic bus capacity.

·   The Group declared a second interim single-tier dividend of 1.0sen/share for FY27 (2QFY26: 1.0sen/share), payable on 3 Nov 2026 with an ex-date of 14 Oct 2026.

·   Earnings growth was supported by resilient domestic and cross-border ridership, SBST contributions and stronger vehicle assembly and distribution, partly offset by higher inter-segment eliminations.  

·   We remain positive on the Group’s medium-term outlook, supported by the RM211m unbilled orderbook, fleet expansion, subsidised diesel and potential RTS first- and last-mile opportunities, although peak-hour bus ridership could face some diversion.

·   Maintain BUY with a revised TP of RM2.38 (previously: RM2.62), based on an unchanged 14x FY28F P/E applied to our revised FY28F core EPS of 17.0sen. The revised TP reflects our housekeeping exercise following the enlarged share base and the transition to a new analyst, together with our revised earnings estimates.

 

Deem It In Line. After adjusting for unrealised forex gain (-RM0.535m), HI Mobility posted 2QFY27 CNP of RM16.6m (-1.6% YoY, +5.6% QoQ). 6MFY27 CNP accounted for 44% of our FY27F estimate and 43% of market consensus. We deem the results to be in line with our expectations, as we anticipate a stronger 2HFY27, supported by seasonally higher travel demand and the ramp-up of domestic bus capacity. YoY comparisons are based on restated 2QFY26 figures.

 

Dividend. HI Mobility declared a second interim single-tier dividend of 1.0sen/share for FY27 (2QFY26: 1.0sen/share), payable on 3 Nov 2026, with an ex-date of 14 Oct 2026.

 

QoQ. Revenue grew 7.0% QoQ to RM119.3m (1QFY27: RM111.5m), mainly driven by higher overall ridership across the Group’s domestic and cross-border scheduled bus services, while vehicle assembly and distribution revenue also rose 89.6% QoQ to RM61.9m. CNP increased 5.6% QoQ to RM16.6m (1QFY27: RM15.7m), outpacing revenue growth on stronger operating performance.

 

YoY. Revenue declined 4.2% YoY to RM119.3m (2QFY26: RM124.5m, restated), mainly due to higher inter-segment eliminations of RM29.3m (2QFY26: RM2.2m) following increased internal bus supply. Scheduled bus revenue grew 4.6% YoY, driven by SBST contributions and resilient domestic and cross-border ridership, while higher advertising and maintenance income supported the other services segment. Vehicle assembly and distribution revenue also increased 30.5% YoY to RM61.9m. CNP declined 1.6% YoY to RM16.6m, as stronger operating performance and a lower effective tax rate were more than offset by higher finance costs.

 

Outlook. We maintain a positive outlook on HI Mobility, supported by sustained domestic and cross-border ridership, seasonally stronger 2HFY27 travel demand and continued fleet expansion. The Group’s bus operations remain relatively insulated from diesel price volatility, as its public bus fleet continues to enjoy subsidised diesel at RM1.88/litre. The RM211m unbilled orderbook also provides earnings visibility, while the upcoming RTS Link presents additional first- and last-mile opportunities. While the RTS Link offers a faster alternative for cross-border commuters, Causeway Link retains advantages in terms of lower travel cost, 24-hour operations and broader route coverage. The RTS Link could nevertheless divert some peak-hour ridership from buses, particularly among time-sensitive commuters, although its higher cost and more limited operating hours could support continued demand for bus services during off-peak periods.

 

Earnings revision. We revised our FY27F/FY28F/FY29F CNP estimates downwards by 1.8%/5.1%/3.6% to RM71.2m/RM90.9m/RM114.9m, respectively, following the 2QFY27 results.

 

Valuation. We maintain our BUY recommendation but revised our TP to RM2.38 (previously RM2.62), based on an unchanged 14x FY28F P/E multiple applied to our revised FY28F core EPS of 17.0sen (previously: 18.7sen). The revised TP mainly reflects our housekeeping exercise following the enlarged share base and the transition to a new analyst, together with our revised FY28F earnings estimates. We believe the unchanged valuation multiple remains appropriate, supported by HI Mobility’s structural growth prospects across scheduled bus services, vehicle assembly and distribution, as well as potential first- and last-mile opportunities from the RTS Link.

 

Risks. Key risks include weaker domestic and cross-border ridership, potential RTS-related ridership diversion, delays in government contract awards and higher-than-expected operating costs.

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