KTB share price electrified by revision

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KUALA LUMPUR: Konsortium Transnasional Bhd’s (KTB) share price rose 22.58% yesterday, stimulated by the Land Public Transport Commission (Spad) announcement of fare hikes for taxis and express buses.

The counter jumped seven sen or 22.58% to 38 sen yesterday, with 34.90 million shares changing hands, giving the public bus operator a market capitalisation of RM147.02 million.

KTB (fundamental: 0.3; valuation: 1.2) is the largest operator of public bus transport in Malaysia. It operates the Transnasional  express buses, Plusliner economy express buses and Nice executive and luxury coaches.

Spad announced fare hikes yesterday for taxis with immediate effect, and for express buses starting May 15.

Express bus fares will be raised 22.58% from 9.3 sen per km to 11.4 sen per km. 

When contacted, a senior executive at KTB said that this round of revision would give the group a boost of about 13.55% to its top line, as approximately 70% of revenue was contributed by express bus fares.

“It  will contribute to better results, but it is hard to estimate how much of the increase we will able to see by year end,” he said.

Nevertheless, the impact on KTB’s net profit may be dampened by the group’s ageing fleet. 

“There would be improvements in bottom line for FY15, as KTB not only benefits from the fare hike, and also its Negeri Sembilan SBST (Stage Bus Service Transformation) contract. But the ageing fleet could be a drag, as it incurs higher cost to operate,” he said. 

SBST is a contract awarded to KTB by Spad last month to provide stage bus services in Negeri Sembilan, starting from April this year. 

The company has been contracted to deploy 100 stage buses.

According to KTB’s latest unaudited financial results for the financial year ended December 2014 (FY14), announced to Bursa Malaysia, the group registered a 57.56% drop in net profit to RM13.89 million in FY13. Revenue fell 8.1% to RM221.39 million from RM240.96 million in FY13.

The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.


This article first appeared in The Edge Financial Daily, on March 20, 2015.