RHB Investment Bank Bhd (RHB Research) has assigned a fair value of 38 sen to ACE Market-bound Bus Cap Bhd, implying a potential upside of 66% from its IPO price of 23 sen per share.
In an IPO note, RHB Research said Bus Cap is well-positioned to benefit from rising demand for buses driven by tourism recovery, stronger intercity and cross-border travel, as well as recurring fleet replacement demand under the 10-year lifespan rule for express buses.
The research house noted that Malaysia’s new bus registrations rebounded sharply to 1,355 units in 2025 from 276 units during the pandemic, surpassing pre-pandemic levels.
Bus Cap, which operates through Sin Hock Leong Coach Works Sdn Bhd, currently has manufacturing capacity of about 168 buses annually and is expanding further through a planned new factory and semi-automated fabrication line aimed at improving efficiency and shortening delivery lead times.
RHB Research expects the new automated plant to reduce production lead time from four months to three months by FY2029, while boosting production efficiency by around 15%.
For FY25, Bus Cap posted revenue of RM88.1 million and net profit of RM9.7 million. RHB Research projects revenue to rise to RM106.4 million in FY26, RM120.6 million in FY27 and RM142.9 million in FY28, with net profit forecast to increase to RM11.7 million, RM13.3 million and RM15.9 million respectively.
The research house derived its valuation based on an 11-times FY27 forecast price-earnings multiple, noting that Bus Cap’s IPO valuation of 6.6 times FY27 earnings remains below both the Bursa Malaysia Industrial Products & Services Index and the Bursa Malaysia Small Cap Index.
Bus Cap’s IPO involves the issuance of 107.3 million new shares and an offer for sale of 19.2 million existing shares, with the exercise expected to raise RM24.7 million primarily for factory construction, machinery purchases, working capital and listing expenses.
Bus Cap is scheduled for listing on the ACE Market of Bursa Malaysia Securities Bhd on June 3, 2026.
