Litrak’s 1HFY13 net profit of RM66.5m was within both our and consensus estimates, accounting for 50.2% and 48.5% of the full-year projections respectively. With the numbers coming in largely in line, we make no major changes to our core assumptions. Maintain BUY, but at a slightly revised SOP-based FV of RM4.44, after fine-tuning our model for housekeeping purposes.
Decent first half. Litrak’s 1HFY13 revenue, which clocked in at RM184.2m (+2.6% y-o-y), came within both our and consensus estimates at 50.4% and 51.2% of the FY13 forecasts respectively. EBIT, however, shed 6.0% y-o-y to RM137.8m due to higher opex as well as escalated amortization expenses in relation to its LDP highway, which surged 36.7% over the period to RM25.7m. All in, the company’s 1HFY13 core earnings came in at RM66.5m, marking a decline of 4.5% y-o-y but in line with our estimates.
Quarterly numbers within expectations. On a quarterly basis, the company’s 2QFY13 revenue amounted to RM91.5m while net profit stood at RM31.4m. The numbers were generally weaker q-o-q due to seasonal factors, and y-o-y as well, owing to higher amortization charges following the revision of LDP’s traffic projections in 4QFY12. Overall, we deem the decent 2QFY13 results within expectations.
BUY. With its 1HFY13 numbers largely in line, we make no changes to our core assumptions for now. That said, our SOP-based FV is revised marginally from RM4.46 to RM4.44 after fine-tuning our model for housekeeping purposes. With a potential upside of 7.0% to our revised FV on top of the dividend yield of close to 5% p.a., we are maintaining our BUY call.
FYE Mar (RMm)
|
FY10
|
FY11
|
FY12
|
FY13f
|
FY14f
|
Revenue
|
310.5
|
318.6
|
358.7
|
365.6
|
371.2
|
Net Profit
|
86.0
|
95.8
|
83.2
|
132.4
|
145.8
|
% chg y-o-y
|
-15.8%
|
11.4%
|
-13.2%
|
59.2%
|
10.1%
|
Consensus
|
137.3
|
144.5
| |||
EPS (sen)
|
16.9
|
18.8
|
16.3
|
26.0
|
28.7
|
DPS (sen)
|
17.0
|
17.0
|
17.0
|
20.0
|
22.0
|
Dividend yield (%)
|
4.0%
|
4.0%
|
4.1%
|
4.8%
|
5.3%
|
ROE (%)
|
20.1%
|
26.0%
|
21.8%
|
32.1%
|
32.7%
|
ROA (%)
|
3.7%
|
4.3%
|
3.6%
|
5.9%
|
6.5%
|
PER (x)
|
24.6
|
22.0
|
25.4
|
15.9
|
14.5
|
BV/share (RM)
|
0.84
|
0.72
|
0.75
|
0.81
|
0.88
|
P/BV (x)
|
4.9
|
5.7
|
5.5
|
5.1
|
4.7
|
EV/EBITDA (x)
|
11.3
|
11.3
|
10.0
|
9.8
|
9.5
|
Results Table (RMm)
FYE Mar (RMm)
|
2Q13
|
1Q13
|
Q-o-Q chg
|
YTD FY13
|
YTD FY12
|
Y-o-Y chg
|
Comments
|
Revenue
|
91.5
|
92.7
|
-1.4%
|
184.2
|
179.5
|
2.6%
|
1HFY13 numbers came in spot on against our forecast at 50.1% of the estimate
|
EBIT
|
67.2
|
70.6
|
-4.9%
|
137.8
|
146.6
|
-6.0%
| |
Net interest expense
|
-20.2
|
-20.2
|
0.1%
|
-40.4
|
-44.3
|
-8.7%
| |
Associates
|
-2.3
|
-1.1
|
>100%
|
-3.4
|
-3.8
|
-12.4%
| |
PBT
|
44.6
|
49.3
|
-9.5%
|
94.0
|
98.5
|
-4.6%
| |
Tax
|
-13.2
|
-14.2
|
-6.7%
|
-27.4
|
-28.8
|
-4.7%
| |
MI
|
-
|
-
|
-
|
-
|
-
|
-
| |
Net profit
|
31.4
|
35.1
|
-10.7%
|
66.5
|
69.7
|
-4.5%
|
2QFY13 numbers were generally weaker q-o-q due to seasonal factors; On a y-o-y basis, numbers were lower owing to higher amortization expenses
|
EPS (sen)
|
6.2
|
6.9
|
13.0
|
13.7
| |||
DPS (sen)
|
0.0
|
10.0
|
10.0
|
10.0
|
No dividend was declared during the quarter, we target a full year DPS of 20.0 sen from 1HFY13’s 10.0 sen
| ||
EBIT margin
|
73.4%
|
76.2%
|
74.8%
|
81.7%
| |||
NTA/Share (RM)
|
0.79
|
0.82
|
0.79
|
0.77
|
Valuation Component
|
RM/m
|
Equity Cost
|
Stake
|
LITRAK's share
|
RM/ Share
| |
PV of FCFE - LDP
|
1,821
|
9.5%
|
100%
|
1,821
|
3.58
| |
PV of FCFE - SPRINT
|
669
|
11.0%
|
50%
|
335
|
0.66
| |
Cash balance
|
356
|
-
|
100%
|
356
|
0.70
| |
FCFE based valuation
|
2,511
|
4.93
| ||||
Discount to valuation
|
10%
|
(251)
|
(0.49)
| |||
Target price
|
2,260
|
4.44
|
EARNINGS FORECAST
FYE Mar (RMm)
|
FY10
|
FY11
|
FY12
|
FY13f
|
FY14f
|
Turnover
|
310.5
|
318.6
|
358.7
|
365.6
|
371.2
|
EBITDA
|
285.1
|
284.2
|
322.9
|
329.1
|
337.8
|
PBT
|
127.3
|
133.9
|
119.5
|
179.0
|
195.7
|
Net Profit
|
86.0
|
95.8
|
83.2
|
132.4
|
145.8
|
EPS (sen)
|
16.9
|
18.8
|
16.3
|
26.0
|
28.7
|
DPS (sen)
|
17.0
|
17.0
|
17.0
|
20.0
|
22.0
|
Margin
| |||||
EBITDA (%)
|
91.8%
|
89.2%
|
90.0%
|
90.0%
|
91.0%
|
PBT (%)
|
41.0%
|
42.0%
|
33.3%
|
48.9%
|
52.7%
|
Net Profit (%)
|
27.7%
|
30.1%
|
23.2%
|
36.2%
|
39.3%
|
ROE (%)
|
20.1%
|
26.0%
|
21.8%
|
32.1%
|
32.7%
|
ROA (%)
|
3.7%
|
4.3%
|
3.6%
|
5.9%
|
6.5%
|
Balance Sheet
| |||||
Fixed Assets
|
1,893.8
|
1,851.9
|
1,918.9
|
1,926.4
|
1,902.8
|
Current Assets
|
434.6
|
364.9
|
371.4
|
334.2
|
344.8
|
Total Assets
|
2,328.4
|
2,216.8
|
2,290.3
|
2,260.7
|
2,247.6
|
Current Liabilities
|
149.1
|
111.4
|
187.8
|
163.4
|
160.4
|
Net Current Assets
|
285.5
|
253.5
|
183.6
|
170.8
|
184.4
|
LT Liabilities
|
1,751.4
|
1,736.9
|
1,720.6
|
1,684.7
|
1,640.8
|
Shareholders Funds
|
427.9
|
368.5
|
381.9
|
412.6
|
446.4
|
Net Gearing (%)
|
245.9%
|
307.0%
|
308.3%
|
280.8%
|
246.4%
|
Source: OSK
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