KUALA LUMPUR: Research firms are upbeat over Malaysia Airports Holdings Bhd’s (MAHB) business prospects and opine the current momentum of passenger traffic will continue to provide a strong base for incremental revenue generation moving forward.
Affin Hwang Capital has upgraded its rating on the airport operator to “buy”, while both MIDF Research and Alliance Investment Bank have also maintained a similar recommendation.
Affin Hwang Capital said the second half of this year (2H219) is set to be an eventful period for MAHB as the group is in discussions with relevant authorities, including the Transport and Finance Ministries, on the details of a new operating agreement (OA) and regulated asset base (RAB) framework.
“A favourable outcome from these discussions should re-rate MAHB’s share price.
“Management expects the signing of the OA by June/July 2019 and the discussion on the RAB to be completed by end-2019, followed by implementation in 2020,” it said in a note.
The research house has also raised its earnings forecast by nine-13 per cent for the 2019-2021 estimates, incorporating a milder increase in operating expenses such as staff costs, repair and maintenance costs.
Meanwhile, MIDF Research believed MAHB’s passengers’ traffic growth would be supported by accommodative visa policies in Malaysia for tourists from China and India, which will temper the pressure from the impending international departure levy.
Other growth factors for higher traffic would include direct connectivity seen from international airlines flying straight to locations such as Langkawi, it said.
“As such, we strongly believe MAHB’s passenger numbers can surpass the 100 million mark in 2019, while maintaining a relatively conservative growth rate of 3.5 per cent, which translates to RM102.5 million passengers,” it added.
In the first quarter ended March 31, 2019, MAHB’s net profit dropped to RM149.58 million from RM444.59 million chalked up in the same quarter last year.
Revenue, however, improved three per cent to RM1.25 billion from RM1.22 billion thanks to an increase in overall passenger growth of 3.7 per cent.
Malaysian operations recorded passenger growth of 3.7 per cent (international: +0.8 per cent, domestic: +7.0 per cent) to 25.3 million passengers as compared with the corresponding quarter last year of 24.4 million passengers.
The passenger traffic for MAHB’s Turkey operations increased by 3.8 per cent (international: +20.0 per cent, domestic: -3.8 per cent) to 8.1 million passengers as compared with 7.8 million passengers recorded in the corresponding quarter last year.
As at 10.04 am, the company’s shares on Bursa Malaysia were one sen better at RM7.35 with 59,500 shares changing hands. – Bernama
