HI Mobility 2H FY27 earnings to gain traction on bus deliveries, ridership

KUALA LUMPUR: HI Mobility Bhd's earnings are expected to remain firm in the second half of financial year 2027 (2H FY27), driven by higher commercial vehicle deliveries and stronger cross-border bus ridership during the holiday season.

CIMB Securities Sdn Bhd said HI Mobility was on track to deliver 250 electric buses over the next nine months under a national operator's fleet modernisation programme aimed at accelerating electric vehicle adoption amid higher fuel costs.

As at end-July, HI Mobility had an unbilled order book of RM211 million, providing earnings visibility, the firm said.

"We expect HI Mobility's resilient earnings growth to be underpinned by seasonally stronger cross-border ridership during the Malaysian and Singaporean holiday periods, coupled with higher bus deliveries," it said in a note.

The outlook follows a stronger second quarter, with HI Mobility's core net profit rising 8.7 per cent quarter-on-quarter to RM19 million, while revenue increased seven per cent to RM119.3 million.

This was mainly driven by an 8.3 per cent increase in scheduled bus services revenue as cross-border ridership recovered.

Cross-border passenger traffic rose 17.7 per cent to six million during the quarter, supported by contra-lane services that helped ease congestion along the Causeway and increased bus trip frequency.

HI Mobility also declared an interim dividend of one sen per share, bringing its first-half dividend to two sen.

For 1H FY27, revenue jumped 50.9 per cent year-on-year to RM231 million, reflecting the consolidation of its commercial vehicle manufacturing, assembly and distribution businesses following the Acacia and Handal BCM acquisitions on April 8.

The newly consolidated segment accounted for 28.1 per cent of group revenue during the period.

Scheduled bus services revenue also grew 6.5 per cent, supported by new intra-city contracts under BAS Muafakat Johor.

CIMB Securities maintained its "Buy" call and RM2.80 target price on HI Mobility.

The stock last closed at RM1.86, down 32.12 per cent from RM2.74 at the start of the year.

It said the year-to-date decline was partly due to delays in the award of the Johor-Singapore Rapid Transit System (RTS) Link dispersal bus contract.

The delay, however, had minimal impact on CIMB Securities' earnings forecasts as the firm had not factored in any contribution from the contract.

CIMB Securities said HI Mobility's strong track record in Johor and existing presence under BAS Muafakat Johor could strengthen its position for the expanded Stage Bus Service Transformation (SBST) programme.

"Feeder and dispersal routes serving the upcoming RTS Link are likely to be incorporated into the expanded Johor SBST programme. The upcoming SBST contract renewal could drive multi-fold increase in both contract value and fleet size," it said.

HI Mobility currently holds a five-year RM282.5 million contract to operate Johor Bahru's SBST network from March 2022 to March 2027.