CIMB Investment Bank Bhd (CIMB Securities) maintained a BUY rating on HI Mobility Bhd with an unchanged target price of RM3.10, citing a projected 26.3% core net profit compound annual growth rate (CAGR) from FY25 to FY28.
The research house highlighted catalysts including rising cross-border traffic, potential Rapid Transit System (RTS) feeder-route contract awards and expansion into the commercial segment through the pending Acacia and Handal BCM acquisitions.
HI Mobility’s 3QFY1/26 revenue rose 3.7% quarter-on-quarter to RM82.2 million, primarily driven by stronger contributions from its Malaysia-Singapore cross-border scheduled bus services. Average daily cross-border ridership increased 2.1% to 68,192 passengers.
Net profit grew 6.0% QoQ to RM14.7 million, while core net profit remained flat, excluding minor property, plant and equipment write-offs and unrealised forex gains.
The company declared a second interim dividend per share of 1 sen, bringing total 9MFY26 DPS to 3 sen, in line with CIMB’s full-year forecast of 4 sen.
Overall, 9MFY26 results accounted for 79% of CIMB’s and 80% of consensus full-year net profit estimates.
The company’s growth outlook is underpinned by infrastructure developments in Johor, particularly the Johor–Singapore RTS Link and the Johor-Singapore Special Economic Zone, which are expected to structurally enhance cross-border commuting, tourism and logistics flows.
Expansion into the commercial segment through Acacia and Handal BCM acquisitions provides an additional growth driver.
CIMB Securities noted that potential re-rating catalysts include new RTS feeder-route contracts, increased cross-border ridership, higher dividend payouts and completion of the Acacia and Handal BCM acquisitions.
Conversely, delays in the RTS rollout, slower cross-border traffic or labour shortages could temper upside potential. HI Mobility trades at RM2.40 per share with a market capitalisation of RM1.20 billion (US$291 million) and a free float of 26%.
As of 11.02 am, the stock price is up 1.59% to RM2.56.
