Markets
Bonus shares and warrants allure from PTrans
Alan Voon 
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PTRANS-WA, the company warrant of Perak Transit Bhd (PTrans), began trading on Bursa Malaysia on Sept 28. The warrant fluctuated between 10 and 14 sen after listing and ended trading on Oct 4 at 12 sen.

The mother share closed at 28 sen on the same day. Listed a year ago at an initial public offering (IPO) price of 15 sen per share, PTrans’ share price has now almost doubled.

Compared to the bigger IPOs on Bursa this year which somehow disappointed subscribers, PTrans brought cheers to those who have faith in the company by rewarding them with bonus shares and warrants.

The company owns and operates the integrated Amanjaya Terminal in Ipoh which has been in operation since 2012.

It also rents out shop spaces as well as advertising and promotional spaces. Its three main businesses are integrated public transportation terminal, bus operations and petrol stations.

In the first half, PTrans recorded a 45% growth in revenue to RM55.03 mil from RM37.93 mil a year ago. Its net profit grew at a faster pace of 83% to RM13.8 mil from RM7.16 mil during the same period.

 

Terminal Kampar

PTrans explained in the notes accompanying its financial results that its revenue is mainly derived from rental of space and facilities at its public transportation terminal, the provision of public stage bus and express bus services, petrol station operations and management of the automotive diesel oil incentive programme.

All the three segments experienced revenue surge with project facilitation fees within its terminal operations contributing a substantial portion of the growth.

Moving forward, PTrans intends to develop an integrated public transportation terminal in other parts of Perak and regions in Malaysia. It has commenced the construction of Terminal Kampar, a lifestyle-centric bus terminal which is expected to be completed by the fourth quarter of next year.

Boasting a net lettable area (NLA) of 400,000 sq ft – or almost eight times the NLA of 49,000 sq ft at Amanjaya – the new terminal consists of cinema, leisure bowling alleys and a budget hotel.

In addition to Terminal Kampar, PTrans has plans to include similar integrated public transportation terminals in Bidor and Tronoh. Its board of directors expect favourable financial performance for the financial year ending Dec 31.

PTrans has recently completed a one-for-10 bonus issue of shares and one-for-two bonus issue of warrants which led to the birth of PTRANS-WA.

A total of 114.29 million new shares and 571.47 million warrants were issued pursuant to the above corporate exercises. At the current price levels, PTARNS-WA is trading at a relatively far premium of 26.8%.

Nevertheless, its three-year tenure may not be too much to the liking of some investors although the company is expected to record significant growth if it successfully implements its strategies, moving forward.

PTRANS-WA may be attractive for some traders due to its gearing of more than 2.3 times. However, after adjusting for delta, the effective gearing for PTRANS-WA is lower at 1.81 times.

Therefore, traders buying into PTRANS-WA can expect the warrant to outperform the mother share by 81% should the mother share price rise in the short term.

The writer is CEO of Warrants Capital Sdn Bhd



This article first appeared in Focus Malaysia Issue 253.