MAHB shares selldown overdone, says analyst
The selldown of Malaysia Airport Holdings Bhd (MAHB) shares on Thursday was overdone, says a research house.
MAHB’s share price retreated eight per cent on that day, which RHB Research believes was due to uncertainty over the new Regulatory Asset Base (RAB) framework.
The stock tumbled 66 sen to RM8.04, its biggest fall since November last year. It wiped out RM1.09 billion of the airport operator’s market capitalisation on Thursday.
“We believe the selling was overdone as a lower Passenger Service Charge (PSC) is likely to be neutralised by a decrease in user fees payable to the government,” it said in a report yesterday.
Transport Minister Anthony Loke reportedly said the ministry was looking at alternatives to the RAB framework for future domestic airport developments.
Separately, Malaysia Aviation Commission has yet to publish the final paper on the RAB framework that will set the PSC.
It was due to have been published on Oct 1.
RHB Research estimates it could take another one to two years to come out with a new framework as it involves many stakeholders.
“There is still a likelihood that the RAB framework will still be implemented, although the details may change. For example, its validity may only apply for Phase 1, which covers the 2020-2022 period,” it said.
RHB Research said the previous announcement of the PSC reduction was through the user fees’ contra method. This means the earnings impact is “neutral” to MAHB as the lower PSC collection would be neutralised by a drop in user fees paid to the government.
“If the new RAB framework results in a lower PSC, we believe this arrangement will remain,” it added.
Despite the uncertainty in the timing, RHB Research added that any reduction in PSC would likely be earnings-neutral for MAHB.
The share selldown has lowered MAHB’s valuation to 22.6 times for its financial year 2020 price-earnings ratio, which means most of the negatives have been priced in.
MAHB shares recovered some ground and closed 1.12 per cent, or nine sen, higher to RM8.13 yesterday.