Hi Mobility Berhad - LOI for Continue Johor Bahru SBST Operations
Fri, 09-Oct-2026 07:13 am
by Wong Kai Heng • Apex Research

Counter

HI (5335)

Target Price (RM)

2.38

Recommendation

Buy

  • LOI received for proposed appointment as Johor Bahru SBST network operator through Mar 2031. 

  • Proposed appointment aligned with HISB’s established smart mobility and fleet management capabilities.

  • 921-bus fleet, including 65 EV buses, provides a solid base for capacity expansion.

  • RTS Link offers potential first- and last-mile opportunities, with 40 buses being prepared ahead of opening.

  • Maintain BUY with RM2.38 TP; no earnings revision pending further details on the proposed appointment.

 

LOI for continued SBST operations. HI Mobility, via its wholly-owned subsidiary Handal Indah Sdn Bhd (HISB), received a Letter of Intent (LOI) from APAD for the proposed appointment as the network operator under the Stage Bus Service Transformation (SBST) programme in Johor Bahru, for the period from 1 Jan 2027 to 31 Mar 2031. The proposed appointment remains subject to further negotiations and the execution of the relevant SST/definitive agreements. 

 

Our View. We view the LOI positively as it could provide medium-term earnings visibility for HI Mobility’s scheduled bus operations in Johor Bahru, given the proposed continuation of its SBST operations. The proposed appointment is also well aligned with HISB’s existing capabilities in smart mobility, technology integration, fleet management and operational execution, supporting its ability to deliver efficient and reliable public transport services. However, the LOI is non-binding, with the service scope, contractual terms and contract value still subject to further negotiations.

 

Outlook. We remain positive on HI Mobility’s outlook, supported by sustained domestic and cross-border ridership and continued fleet expansion. As at 31 July 2026, the Group operated 921 buses, including 65 EV buses, providing a sizeable fleet base for its ongoing operations and expansion. The upcoming RTS Link presents potential first- and last-mile opportunities, with management preparing 40 buses ahead of its opening to ensure fleet readiness. Meanwhile, the proposed continuation of the Johor Bahru SBST operations through Mar 2031, if formalised, could provide further visibility for the Group’s scheduled bus operations.

 

Earnings Revision. No change to our FY27F–FY29F CNP estimates at this juncture, pending further details on the proposed appointment.

 

Valuation. We maintain our BUY recommendation and TP of RM2.38, based on an unchanged 14x FY28F P/E applied to our FY28F core EPS of 17.0sen.

 

Risks. Key risks include non-finalisation of the proposed appointment, changes to the service scope or contract terms, and higher-than-expected fleet investment requirements.

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