MAHB EARNINGS LIKELY TO REMAIN POSITIVE
TA Securities keeps ‘sell’ call on airport operator with target price of RM8.47 a share
MALAYSIA Airports Holdings Bhd (MAHB) earnings recovery, concession extension, and possible sale of minority stake in Istanbul Sabiha Gokcen (ISG) airport as well as special dividend is expected to reflect positive momentum for the company moving forward.
TA Securities Holding Bhd has also noted MAHB’s October 2017 operating data continued to reflect favourable travel sentiment, underpinned by visa relaxation and currency advantage.
International passenger movement surged 13.1 per cent yearon-year (YoY) in the month of October to 4.0 million passengers, while domestic passenger recorded 1.3 per cent growth to 3.8 million passengers.
The growth in international passengers was mainly contributed by the North East Asia, South Asia and South East Asia sectors.
In its analysis, TA Securities raised MAHB’s financial year ending December this year to 2019 earnings projections within the range of 12.9 per cent and 14.0 per cent, after revising its financial year (FY) 2017-2019 passenger growth assumptions.
Moving forwards, the research firm said MAHB’s operating environment is currently clouded with surging crude oil price, which would tend to reduce airline’s income.
The research house believes passenger movement in Malaysia would remain robust next year, underpinned by additional capacity from AirAsia group and a short-term one-off impact of the 14th general election.
On its operations abroad, MAHB’s ISG airport also recorded 6.6 per cent YoY growth in passenger movements to 2.8 million passengers, driven by both international and domestic segments increased by 10.3 per cent and 4.9 per cent, respectively.
The increase in passenger has contributed to higher cumulative in the first 10 months of thsi year growth of 4.3 per cent.
TA Securities maintains a “sell” call on MAHB with a target price of RM8.47, and maintain growth projection of 7.2 per cent for this year, inline with management guidance.