Is It Safe to Bottom-Fish PTRANS?

There is one company who keeps breaking its record high net profits for 10 consecutive years since IPO listing in 2016. It even achieved profit growth in the year of 2020 disrupted by Covid-19.

It's not selling gloves or Covid-19 test kits or vaccines. It's not QL or Scientex either.

The company is Perak Transit Berhad (PTRANS) who operates bus terminals, provides public bus transport services & owns petrol stations which were supposed to be badly hit by Covid-19 lockdown.

Now it even achieves a fantastic feat of  9 consecutive quarters of record high net profits which seems to be sustainable going into the near future.

It is like a "dream company" that most fundamental investors would want to have in their portfolio.

Its magnificent share price run spoke for itself. It rallied from 30sen to over 85sen (both adjusted share price) within a few months in 2022.

However, after hovering around 70sen since Apr25, its share price took a sudden dive to 33.5sen on 22 Oct25, and keeps tumbling to 26.5sen now.

Most of its investors were caught off guard and suffered heavy loss.

Why did the share price of PTRANS fall so hard in the first place?

If you ask me, I really don't know.

Initially I thought there might be bad news such as red flags raised by its auditor, but now almost one month has passed and there is none.

Could it be due to stock market manipulators or syndicates harvesting their fruits? But I think we seldom see such thing happening in a fundamentally sound company.

Soon I found that its managing director (MD), who is also the largest shareholder, sold lorry loads of its own company's shares. 

After checking, only I realize that the MD has almost all his PTRANS shares pledged to investment banks. Is the drastic drop in share price simply due to margin call?

If yes, what or who triggered the margin call?

From PTRANS 2024 annual report, out of the top 30 shareholders, 24 of them (80%) have their shares pledged.

The MD has 7 pledged accounts under his name in the top 30, and owned 23.4% of PTRANS shares as at 28 Mac 2025. All are pledged shares except 4.94% held under his wife's name. 

Actually the MD has been actively converting warrants and selling shares in the open market since Jan 2025.

He keeps selling, but also buying at the same time and transferring his shares from one investment bank to another.

I'm not sure why he did that, may be to prevent share price from dropping when he sold shares? Or may be he already felt the pressure of margin call at that time?

Although he kept selling and buying, his shares in PTRANS reduced from 30% in Jan 2025 to only 14% before share price hit limit down on 22 Oct25.

Then, it's highly likely that he got the margin call and force-selling. His shareholding has been dropping fast to 8.95% in just 2 weeks time.

At the moment, the selling seems to stop since 7 Nov25 which is one week ago. 

There are many top 30 shareholders whose shares are pledged so they will face margin call as well.

PTRANS's share price dropped further to 26.5sen now. As the MD seems to stop selling (at least temporarily), is it time to bottom fish?

Its TTM EPS is 6.77sen. Its PE ratio is only at 3.9.

It pays consistent dividends about 2sen per year. It's a high dividend yield of 7.5% at share price of 26.5sen.

If there is no problem in its accounts and businesses, then why don't we "all-in" PTRANS?

There are some concerns though.

First, if the company and its prospect are so good, why does the MD, who is also the largest shareholders sell his shares aggressively since Jan25? 

Why didn't he pass the shares to his children or close relatives? Why didn't he sell them off-market to interested parties?

I read that some investors are suspicious in its profit. How can a company who only operates bus terminals in Ipoh, Kampar & Bidor earn so much?

Even though I have not been to those bus terminals, internet search reveals that they are not that happening and are unlikely to attract strong tenants and advertisements.

Its Ipoh (Terminal Meru Raya) & Kampar (Terminal Kampar Putra) terminals have a combined NLA of 338,071 sqft. Both of them contributed RM75.7mil of rental revenue to PTRANS in FY23.

For comparison, Asiapac's Imago Mall, which is an established shopping mall in Kota Kinabalu with NLA of 800,000 sqft, contributed RM99.3mil of rental revenue to Asiapac in almost the same period of time.

Although these figures might not be 100% accurate, I must say that PTRANS's management are doing a marvelous job.

I did a brief study on PTRANS about 3-4 years ago but in the end I didn't invest in it. I actually regretted my decision because its share price rose 2-3 times later. 

At that time, I was not too confident with its business model and was not sure about the "project facilitation fee" in its financial report.

The image below is taken from annual report 2024. It shows the amount of project facilitation fee under integrated public transportation terminals (IPTT) in 2024 and 2023.

This project facilitation fee made up 24% (RM29.9mil) & 29% (RM32.3mil) of its IPTT revenue in 2024 & 2023 respectively.

It might not be something to be worried about.

However, when I studied PTRANS few years back, this was what I saw:

The project facilitation fee made up 56% (RM39.5mil) & 53% (RM29.3mil) of its IPTT revenue in 2020 & 2021 respectively.

Thus, it was the main revenue (and may be profit) contributor to PTRANS, which made me eager to find out more about it before investing in this company.

PTRANS did explain what is project facilitation fee in its AR2020.

Frankly speaking, I do not understand what this project facilitation fee means, even after reading the statement above.

I tend to think that it's like service fees for consultations to customers who wish to build a bus terminal or plan a public bus transport system. 

If it is, why is the fee relatively high at RM30+mil, and who are its customers that are willing pay for it? Are they the local governments? 

In 2021 & 2022, the project facilitation fee was RM39mil & RM30.2mil respectively. This fee seems to be so consistent at RM30+mil every year.

As the rental income increases over the years, the project facilitation fee has become less significant.

Anyway, I don't mean that there is fraud in the account. I just don't understand it.

If anyone who knows what this project facilitation fee is about, kindly enlighten me and readers here.

From FY22 to FY24, there are 3 consecutive years of negative free cash flow despite the increasing profits, which also raised a bit of concern.

Its capex (purchase of PPE & investment properties) added up to RM655mil in 4 years from FY21 to FY24. 

As far as I know, over these 4 years, PTRANS was only working on its third terminal Bidor Sentral, which was reported to carry a cost of RM135mil.

As I don't dig into the details, investors might want to find out what have been purchased and invested. Did the company buy a lot of buses?

The case of PTRANS shows that the stock market is risky. A supposedly good fundamental company can have its share price crashing like that.

What I've learned is, be careful of company with lots of pledged shares in its top 30 shareholders.

MMAG which has also gone Holland recently, has 27 pledged shares accounts among its top 30 shareholders.

Cape EMS, who recently collaborated with PTRANS, also faced the same fate last year.

If the company and its account is clean, it looks like a good time to accumulate PTRANS's shares once the dust has settled. 

Its upcoming FY25Q3 result might continue to break record high which might give its share price a push.

So, is it safe to bottom-fish PTRANS now?

Before you do this, just make sure that it is a fish, not a shark.