MAHB’s FY16 passenger traffic growth in line, growth to remain strong
KUCHING: Malaysia Airports Holdings Bhd’s ( MAHB) financial year 2016 ( FY16) passenger traffic growth have come in within expectations, with analysts expecting passenger growth to remain strong going into financial year 2017 (FY17).
In a filing on Bursa Malaysia, MAHB announced that airports in Malaysia handled 88.8 million passengers, representing a six per cent increase over 2015. As for Istanbul Sabiha Gocken International Airport ( ISG Airport), the airport handled 29.6 million passengers in 2016, an increase of 4.8 per cent over 2015.
Malaysia and Turkey passengers of 88.8 million and 29.6 million were within the research arm of Kenanga Investment Bank Bhd’s ( Kenanga Research) expectations, making up 100 per cent and 98 per cent of its targets, respectively.
“For Malaysian operations, growth was mainly contributed by increased travel demand where 27 airlines ( local and foreign) registered double to triple digit growths at the international front prompting all their five international airports to register growth range of three per cent to 13.6 per cent,” it said.
Kenanga Research noted that ISG Airport’s passenger growth for December was down 1.5 per cent year on year (y- o-y) dragged by its international traffic declining 4.6 per cent y- o-y while domestic growth was flattish at 0.1 per cent.
The research arm believed travel sentiment from the international front will continue to remain weak from the travel concerns in Turkey.
Moving into FY17, Kenanga Research has maintained its growth targets of six per cent and seven per cent for Malaysian and Turkey operations as the research arm expected Malaysian passenger growth to remain strong from strong travel demand coupled with increased capacities from airlines such as AirAsia and Malindo while Turkey’s international passenger traffic is expected to remain subdued.
Post review of December traffic figures, the research arm made no changes to its FY16-17 earnings forecasts as passenger growths were in line with its targets.
Kenanga Research also maintained ‘outperform’ on MAHB with an unchanged target price of RM7.31 per share based on a five-year + 0.5 standard deviation ( SD) FY17E price to book value ( PBV) of 1.58-fold in view of the better earnings prospect from the new passenger service charge ( PSC) structure recently implemented.