RHB Investment Bank Bhd has issued an initial public offering note on Bus Cap Bhd, a bus builder with over five decades of established market presence, by assigning a fair value of 38 sen/share or a potential 66% premium from its IPO price of 23 sen.
In a research report entitled “Bursa’s Sole Listed Bus Manufacturing Player”, the research house highlighted Bus Cap as a Malaysian bus manufacturer with a 58-year operating track record by serving customers in Malaysia and Singapore through its core operating subsidiary Sin Hock Leong Coach Works Sdn Bhd.
In RHB Research’s view, Bus Cap is poised to benefit from rising bus demand, supported by tourism recovery, growing intercity and cross-border travel, and recurring replacement demand from the 10-year lifespan regulation for express buses.
The research house noted that Malaysia’s new bus registrations has rebounded from 276 units during the pandemic to 1,355 units in 2025, surpassing pre-pandemic levels.
The report by analyst Queenie Tan further pointed to Bus Cap having expanded its manufacturing capacity to approximately 168 buses per annum while its planned new factory and semi-automated fabrication line are expected to improve production efficiency and shorten lead time.
By FY2029, RHB Research expects the new automated plant to reduce production lead time from around four months to three months while improving production efficiency by approximately 15%.
For FY2025, Bus Cap recorded revenue of RM88.1 mil and net profit of RM9.7 mil based on the RHB Research’s report.
The research house forecasts the group’s revenue to grow to RM106.4 mil in FY2026, RM120.6 mil (FY2027) and RM142.9 mil (FY2028) while net profit is projected at RM11.7 mil, RM13.3 mil and RM15.9 mil respectively.
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RHB derived its fair value of 38 sen by applying an 11 times FY2027F price-earnings multiple which is broadly in line with the three-year average forward price-earnings multiple of the Bursa Malaysia Small Cap Index.
The report stated that Bus Cap’s IPO valuation of 6.6 times FY2027F price-earnings remains below the Bursa Malaysia Industrial Products & Services Index and the small-cap index.
All in all, Bus Cap’s IPO entails a public issue of 107.3 million new shares and an offer for sale of 19.2 million existing shares. The public issue is expected to raise RM24.7 mil which proceeds will be used mainly for the construction of a new factory, purchase of new machines, working capital and listing expenses.
Applications for Bus Cap’s IPO closes today (May 15) with the group’s listing on the ACE Market targeted for June 3. – May 15, 2026
