Company : LITRAK
Business
:
Toll
concessionaire of LDP and SPRINT highway. See details below.
Gamuda,
Amanah Raya, EPF and other fund houses.
Fundamental
:
Consider
net cash as at 30th June 2021 if minus the deferred tax liability. I
still can’t figure out why the deferred tax liability is so high. Company has superb profit margin of 50%! It
is definitely sucking the blood of toll users. The tol rate per km is way much
higher than PLUS highway. I have been contributing to their profit every year!!
Company
is earning approx RM200 million a year. They will reduce the long term Sukuk
loan next year. A 20 cents dividen will cost around RM106 million. In coming year,
25 cents dividen (RM132 million) is very possible when traffic is back to
normal.
|
Item |
31 March 2017 |
31st March 2018 |
31st March 2019 |
|
Cash at bank |
547 mil |
579 mil |
641 mil |
|
Long term
borrowing |
1,119 mil |
987 mil |
775 mil |
|
Short term borrowing |
110 mil |
140 mil |
220 mil |
|
Item |
31 March 2020 |
31st March 2021 |
30th June 2021 |
|
Cash at bank |
626 mil |
621 mil |
442 mil |
|
Long term sukuk
loan |
580 mil |
385 mil |
186 mil |
|
Short term sukuk loan |
200 mil |
200 mil |
200 mil |
5 years revenue record.
Revenue
is stagnant at around RM500+ million and drop to RM392 million in 2021 due to
MCO. Forecast revenue to be around RM 360 million for 2022. However, there is potential
of recovery of traffic starting end August 2021.
Management is prudent in spending and try to increase shareholder’s value. See one of the cost control initiatives below on their annual report.
Quick view on the weekly tollable traffic volume below:
|
Year / Road |
LDP |
SPRINT |
|
2020 (end 31st March 2020) |
447,000 |
199,500 |
|
2021 (end 31st March 2021) |
353,000 |
126,000 |
Competition
BRT
and LRT will be the alternatives for road users. However, these options are
useless for people commuting between Puchong and Damansara. There is no LRT
connecting these two places. So people will still use LDP except less frequent
due to work from home.
Maintenance
cost.
The maintenance cost is fixed and seems small in relation to the revenue. I don’t think there will be major spending in coming years which means no further borrowing for the company.
Lates
result at glance :
Q1
Result
Q1 revenue increase when compared to Q1 previous year. However, it drops when comparing to immediate preceding quarter. Coming Q2 will likely to drop when compared YoY and QoQ due to FMCO that still enforced till third week on August.
Prospect:
There
is no more toll hike for LDP but there will be compensation from Government.
See note below.
One more toll hike for SPRINT Highway for Damansara and Kerinchi link. See note below.
Recovery of traffic.
Rebound
tollable traffic starting from end August 2021. It will probably take some time
to reach pre-COVID level. Anything around 440,000 weekly traffic for LDP will provide
good revenue. A good indicator of recovery is probably the school re-open.
Dividen
Company
is paying stable dividen as you can see from the chart below. A potential
dividen growth to 25 cents (6.5%) is possible when long term borrowing is reduced
and traffic back to normal. This company is good for stable dividen income and
possible share price appreciation of 10%.
Risk
- Take-over by government. This is unlikely as
government is short of money.
- Delay toll price increased. This is highly
possible as government has done it before.
- Lower traffic volume. Likely to see lower traffic
in Q3 (July – Sept) due to FMCO. Pre-Covid traffic level is unlikely to
achieve within this year as schools are still closed and many people are
still work from home as well as retail business are still not fully
recovered.
Technical
Analysis on Chart
Price
on the down trend and likely to go down again when Q2 result released. Support
level at RM3.60. Long term price appreciation of 10% is possible at RM4.20
Forecast
EPS & price
|
Date |
3rd Sept 2021 |
Current Price |
RM3.80 |
||
|
EPS |
|||||
|
Quarter |
Q1 |
Q2 |
Q3 |
Q4 |
Total |
|
Forecast |
7.12 |
6 |
12 |
12 |
37.12 |
|
Actual |
7.12 |
|
|
|
|
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