Technology adoption, market expansion to drive HI Mobility showing

PETALING JAYA: Despite concerns that the Johor-Singapore Rapid Transit System (RTS) Link could reduce cross-border bus ridership, Causeway Link bus operator HI Mobility Bhd sees other opportunities arising from the project, with RTS-related services potentially generating RM600mil to RM700mil in revenue.

Following a briefing with the group, CIMB Research said it came away with a “positive view” of HI Mobility’s near and long-term prospects.

It said the group had outlined several strategic growth pillars aimed at driving earnings beyond 2026, “with a strong emphasis on technology adoption and market expansion”.

“The RTS Link remains a key opportunity to unlock first and last-mile ridership demand,” it said.

“The group also estimates an RM600mil to RM700mil revenue opportunity from RTS Link–related physical asset requirements, including buses, terminal operations, and first- and last-mile mobility services.”

Apart from the RTS Link, CIMB Research said HI Mobility’s growth strategy also centres on autonomous vehicles (AVs) and electric vehicles (EVs), with their deployment expected to reduce direct operating costs by up to 71% through lower fuel, maintenance, repair and overhead expenses.

“HI Mobility aims to realise at least half of these potential cost savings within the next five years,” it said.

In the near term, CIMB Research expects cross-border ridership to remain a key revenue driver.

The research house said ridership temporarily declined in the first quarter ended April 30, 2026 (1Q27), due to severe congestion on the Johor–Singapore Causeway as more Singaporean motorists travelled into Malaysia to take advantage of lower fuel and grocery prices.

However, it noted that ridership has improved in recent months following the implementation of traffic management measures, including dedicated contra-flow bus lanes during peak hours.

Meanwhile, CIMB Research expects HI Mobility’s commercial vehicle assembly and distribution segment to post stronger growth in the second half of the financial year ending Jan 31, 2027 (2H27), supported by a RM240mil order book and accelerating electric bus deliveries.

It said deliveries are expected to pick up from 3Q27 onwards, while production capacity is being increased to 40 to 50 units a month to support the delivery of 130 to 150 EV buses in the second half of calendar year 2027.

Overall, CIMB Research maintained a “buy” call on HI Mobility with an unchanged target price of RM2.80.

This is based based on its 17.8 times projected calendar year 2027 earnings, representing a 20% premium to the public transport sector average of 14.9 times.