Bursa Malaysia Stock Price Target: LITRAK

Downgrade to Hold. LITRAK's RM102m 9MFY12 net profit (+25% YoY) was above our expectations, at 88% of our full-year forecast. We believe this was due to lower-than-expected amortisation for the LDP. We raise FY12-14 forecasts by 12-16% p.a.. However, this being an accounting upgrade with no impact on the cash flows, our RM4.20 DCF-based TP is unaffected. Having outperformed (+12% since Nov 2011) with just 4% upside potential, the stock is now a Hold.

Maybank Research 29 Feb 2012

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Litrak - Turning heads HOLD

Stock Name: LITRAK
Company Name: LINGKARAN TRANS KOTA HOLDINGS

Research House: AMMB

Price Call: BUY

Target Price: 3.90

We maintain our BUY recommendation on Lingkaran Trans KotaHoldings (Litrak), with a higher fair value of RM3.90 (previously:RM3.77/share) ' pegged to an unchanged 15% discount of its revised DCF value(WACC: LDP -8.1%, SPRINT ' 8.6%).

The higher fair value encapsulates an 11% upgrade in FY12F netprofit forecast (FY13F: +9%, FY14F: +5%) following a stronger-than-expectedmargin trajectory for 9MFY11.

Litrak's 9MFY11 results came in ahead of expectations, accountingfor 80%-85% of both consensus and our full-year estimates. The main positivevariance, in our view, stemmed from better-than-expected EBIT margins (9MFY12:77% vs 75% a year earlier).

During the period, the group's bottomline surged 23% YoY arisingfrom the full-year impact of a scheduled toll rate revision from 1 January2011.

Sequentially, its earnings fell 2% QoQ to RM32mil. This was largelydue to a marginal increase in operating expenses incurred during the quarter.

Litrak declared a second interim dividend/share (DPS) of 7 senin 3QFY12, taking 9MFY12 DPS to 17 sen ' matching the payout last year. We haveassumed a total DPS of 18 sen for FY12, translating into a decent yield of 4%.

Litrak has been in the news recently, where the toll concessionaireis reportedly a take-over target of PLUSExpressways along with SILK Holdings.

But, we are unsure if Gamuda ' Litrak's major shareholder witha 45% stake ' would be willing to part ways with the urban toll operator. Thisbeing the case, Litrak has been a steady generator of Gamuda's cash flows overthe years.

Moreover, the continued uncertainties over toll rate hikesand associated risk of back-ended cash flows (i.e. extension of concessionperiod rather than outright cash payment as compensation for delays in tollhikes) is another drag.

Our HOLD rating is premised on its status as a core holding forinvestors seeking exposure to the toll concessions with the de-listing of PLUSand MTD Capital. This is backed by a decent yield offering of 4%-5%.

Source: AmeSecurities

LITRAK (FV RM4.72 - BUY) 9MFY12 Results Review: Solid Numbers on Improved SPRINT

Stock Name: LITRAK
Company Name: LINGKARAN TRANS KOTA HOLDINGS

Research House: OSK

Price Call: BUY

Target Price: 4.72

Litrak posted 9MFY12 earnings of RM102.1m (+24.6% y-o-y)which was above our expectations by meeting 80.7% of our full-year estimates,thanks mainly to lowerthan-expected losses at SPRINT. It declared a secondinterim DPS of 7.0 sen with its 9MFY12DPS now standing at 17.0 sen. Going forward, we expect Litrak's earnings to befairly resilient with the next toll hike for its Damansara link scheduled onlyin 2015. In view of the media speculation on a potential takeover offer by PLUSExpressways, we are removing our 10% discount attached to our previousvaluation and our SOP-derived FV now stands at RM4.72.

Above expectations. Litrak's 9MFY12 revenue came in at RM269.9m(+14.8% y-o-y). YTD operating profit increased 15.0% y-o-y toRM214.5m, with a marginal 20bps improvement in its EBIT margin to 79.6%. All inall, the core earnings of RM102.1m (+24.6% y-o-y) came in slightly above ourexpectations at 80.7% of our full-year estimates owing to lower losses incurredby its 50%-owned SPRINT. From a quarterly perspective, 3QFY12 results generallymarked some decent y-o-y improvement on the recognition of higher toll ratesbut the numbers were weaker sequentially owing to seasonal factors.

Decent yield. Thecompany took the opportunity to declare a second interim DPS of 7.0 sen withits 9MFY12 DPS now standing at 17.0 sen. This implies a healthy payout ratio of84.1% (vis-a-vis our previous assumption of 70%) based on its 9MFY12 earnings,which translates into a decent dividend yield of 4.2% YTD. We now expect its payoutratio to hover around 75%-80% (from 65%-70% previously) as a result of its better cash flow management,and this implies an annualized DPS of 20-24 sen over the next three years.

No hike expected.With the widely anticipated General Election likely to take place this year,we do not foresee any toll hikes in thenear term with the Government likely to continue subsidizing motorists at RM0.50 on LDP toll rates. This ispositive for Litrak as it still receives the agreed rate of RM2.10, without suffering a decline in traffic volumes associated witha toll hike. The next scheduled tollhike takes place in 2015 for its Damansara link, which has almost reached itssaturation point with an average daily traffic of approximately 60k.

BUY. We revisited our model and lowered our losses assumption on Litrak's 50%-ownedSPRINT operations given the encouraging progress made YTD. With that, our EPSforecasts for the next 3 years are revised upward by 6%-7%. In view of thecurrent media speculation on a potential takeover offer by PLUS Expressways, weare now removing our 10% discount attached to our previous valuation, inanticipation of more news flow in the coming months which could give a boost tothe share price. Hence, our SOP-derived FV now stands at RM4.72. Maintain BUY.

Source: OSK188

LITRAK - RNAV premium justified

Stock Name: LITRAK
Company Name: LINGKARAN TRANS KOTA HOLDINGS

Research House: HWANGDBS

Price Call: HOLD

Target Price: 4.00

Litrak; Hold; RM4.03
Price Target: RM4.00 (Prev RM3.65); LTK MK

3QFY12 profit beat estimate, declared 7sen DPS. PLUS' interest in Litrak might appeal to investors. Hold, raised RNAV-derived TP to RM4.00.

Source: HwangDBS Research 29 Feb 2012

November 29, 2011

Lingkaran Trans Kota (Buy): Second quarter of surprise

Stock Name: LITRAK
Company Name: LINGKARAN TRANS KOTA HOLDINGS

Research House: MAYBANK

Price Call: BUY

Target Price: 4.20

Outperformed. RM70m 1HFY12 net profit (+26% YoY) made up 60% of our FY12 forecast. We however maintain our forecasts mindful of accounting adjustments in the final quarter relating to projected traffic flow at the LDP affecting amortisation. Litrak remains a Buy with a RM4.20 DCF-based TP. The stock offers defensive qualities with a 5.6% net yield, and a total return of 22% to our target price.

Maybank research (29 November 2011)

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A quarter above expectations

Stock Name: LITRAK
Company Name: LINGKARAN TRANS KOTA HOLDINGS

Research House: ECMLIBRA

Price Call: BUY

Target Price: 4.42

August 29, 2011

1QFY12: A strong quarter

Stock Name: LITRAK
Company Name: LINGKARAN TRANS KOTA HOLDINGS

Research House: ECMLIBRA

Price Call: BUY

Target Price: 4.42

June 1, 2011

LITRAK - Litrak still not sprinting

Stock Name: LITRAK
Company Name: LINGKARAN TRANS KOTA HOLDINGS
Research House: MIDF

Lingkaran Trans Kota Holdings Bhd
(May 31, RM3.75)
Downgrade to neutral at RM3.72 with target price of RM4.07: Litrak's FY11 net profit of RM98.4 million was below expectations, accounting for only 70.6% and 79.2% of our and'' consensus numbers. The big variance to the forecast was due to our assumption of a scheduled toll rate hike in 2011, which did not materialise. However, FY11 earnings still grew by 14.5% on higher revenue and other income. ''

Net profit dropped 41.2% quarter-on-quarter (q-o-q) to RM15.5 million, caused by a higher share of losses at Sprint, caused mainly by the higher amortisation of highway development expenditure based on the latest toll revenue projections prepared by independent consultants concluded at the end of 4QFY11, hence the entire adjustment has been accounted for in the quarter. ''

All is not lost with Litrak. Revenue was boosted in 4QFY11 to RM83.6 million (+5.1% year-on-year; +6.2% q-o-q), due to holiday traffic as well as the accruals made (based on the terms of the concession agreement) on the scheduled toll hike in January 2011 that the government decided to defer until further notice.

However, FY11 dividend per share was similar to FY10's at 17 sen, a yield of 4.6%. Based on our more than RM250 million'' free cash flow projection for the LDP in FY12, we expect Litrak to raise its FY12 DPS to 19.1 sen (5.14% yield).

We expect traffic loss in FY12 due to fuel price increases and toll rate hike in 2011. However, we do not expect traffic to'' decrease drastically as the LDP is an important commuter route, especially with the lack of'' efficient public transport. We also believe that the new toll rates should moderate any impact from traffic decrease.

Higher fuel prices, such as the recent 20 sen price increase for RON97 to RM2.90 per litre and possible increase for RON95'' (currently'' at RM1.90 per litre), may cause commuters to find alternative transport causing a 'loss' in traffic.'' ''

We are trimming our earnings forecast for FY12 by 30% to reflect escalating fuel prices as well as'' traffic leakage to the'' Duta-Ulu'' Klang'' Expressway (Duke). We also introduce our FY13 earnings forecast of RM127.8 million, assuming a 4%'' increase in traffic, underpinned by new housing developments in Petaling Jaya.

This is based on the dividend discount model, with a weighted average cost of capital of 6.33% and a risk free rate of 4%. We expect investors' interest in Litrak to be intact for its FY12 dividend yield potential of 5.14%, providing a 9.38% upside for its share price.

Litrak is a good defensive stock given that the LDP still enjoys support from its catchment area of'' Puchong, Kelana Jaya, and Bandar Sri Damansara. However, as the upside is capped in a rising market, we are downgrading our recommendation to 'neutral'. ' MIDF Research, May 31

This article appeared in The Edge Financial Daily, June 1, 2011.

February 28, 2011

LITRAK - OSK maintains 'buy' call on LITRAK

Stock Name: LITRAK
Company Name: LINGKARAN TRANS KOTA HOLDINGS
Research House: OSK

OSK Research has maintained its "Buy" recommendation for Lingkaran Trans Kota Holdings Bhd (LITRAK), with RM4.16 lower target price.

The research firm said it has raised LITRAK's financial year 2011, 2012 and 2013 earnings by 3.9 per cent; 1.6 per cent; and
1.1 per cent on lower loss projections for SPRINT Highway.

"We have also updated LITRAK's latest cash balance into our model, which is down slightly. The net impact of these challenges is a cut in our target price from RM4.22 to RM4.16," it said in a research note today.

Meanwhile, OSK Research said the recent approval of PLUS' privatisation was positive for LITRAK since it would be the only listed toll concessionaire, and hence would benefit from the potential switching play.

LITRAK is the toll concessionaire for the Damansara-Puchong Highway and it owned 50 per cent stake in the SPRINT Highway. -- Bernama

January 31, 2011

LITRAK - OSK Research maintains Neutral on tolled road concessionaires

Stock Name: LITRAK
Company Name: LINGKARAN TRANS KOTA HOLDINGS
Research House: OSK

KUALA LUMPUR: OSK Research remains NEUTRAL on the tolled road concessionaires sector but highlights the potential regulatory risks involved.

'We advise investors to sell PLUS (NEUTRAL, TP: RM4.60) rather than to wait for the offer proceeds (+4.8% upside). Being the only pure toll concessionaire post PLUS' privatisation, Litrak (BUY, TP: RM4.22) could benefit should investors switch stocks,' it said on Monday, Jan 31.