New IPO: Prolintas Infra Business Trust

News of the listing of Prolintas has been making the rounds since 2017. Finally, it was being materialised now with the IPO listing. Why this IPO is considered quite unique in the eyes of investors?

First and foremost, there are no pure highway concessionaires that are listed to cater for investors seeking steady dividend returns. Oh really none? Yes, none after the delistings of LITRAK and PLUS.

So, what are the key points for Prolintas?

Prolintas is jointly owned by Permodalan Nasional Bhd (PNB) and Amanah Saham Bumiputera (ASB).

The IPO will encompass the listing, via a business trust structure, of Prolintas’ 4 key matured highways:

1. Ampang-Kuala Lumpur Elevated Highway (AKLEH)
2. Guthrie Corridor Expressway (GCE)
3. Kemuning-Shah Alam Highway (LKSA)
4. Kajang Dispersal Link Expressway (SILK)

• Malaysia’s first Islamic business trust
• Intends to distribute yearly distributions of at least 90% of the Trust Group’s Distributable Amount
• Prolintas Infra BT has provided its net profit forecast for 2024, with net profit and distributable income amounted to RM8.3mil and RM68.7mil respectively.
  
  

Competitive Strengths and Investment Highlights:

• The average remaining concession period of approximately 32 years provides long-term visibility on future toll revenue and cash flow, translating into sustainable distribution for Unitholders
• The highways are located in high traffic areas which cater to nearly half a million daily road users
• Opportunity to invest in highway concession business which has high barrier to entry
• Led by qualified and experienced Board and senior management team from reputable Promoter with proven track record
• Operational excellence through ISO-compliant management systems
• Adoption of innovative technologies to enhance the performance of the Highways’ operations
• Committed to corporate sustainability and the implementation of initiatives that focuses on ESG

Notable Cornerstone Investors are:

• Permodalan Nasional Bhd (PNB)
• Yayasan Pelaburan Bumiputera
• Lembaga Tabung Haji
• AIIMAN Asset Management
• AHAM Asset Management
• Maybank Asset Management
• Maybank Islamic Asset Management
• Kenanga Investors
  
• Kenanga Islamic Investors

Any potential upside? (IPO price RM0.95)

TA Research: Fair value of RM1.06, based on target yield of 6% to a projected dividend per unit (DPU) of 6.38 sen for 2025, representing a potential upside of 11.6%.

Affin Hwang Capital: Potential upside is yield accretive acquisition in the future as Prolintas has first right of refusal to buy two toll highway concessions, namely Sungai Besi - Ulu Kelang Elevated Expressway (SUKE) and Damansara - Shah Alam expressways (DASH). Initiated coverage with "Buy" call with target price of RM1.22.

PublicInvest Research: Estimates the fair value at RM1.08 

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