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MAHB share price up
Published on: Wednesday, May 16, 2018

Kuala Lumpur: Malaysia Airports Holdings Bhd's (MAHB) share price rose Tuesday on bullish passenger traffic outlook after posting a 3.4 per cent growth in passenger traffic in April.At 3 pm, MAHB share price was 42 sen better at RM8.92 with 1.86 million shares changing hands.

MAHB, in a filing with Bursa Malaysia, said its network of airports, including the Istanbul Sabiha Gokcen Airport (SGIA), recorded 11.1 million passengers in April 2018, up 3.4 per cent, over the same month last year.

It said international traffic recorded rose 6.3 per cent, year-on-year (y-o-y) to 5.3 million passengers, while domestic traffic grew 0.9 per cent to 5.8 million passengers compared with the same period a year ago.

"On a last-twelve-month basis, the total MAHB network of airports registered 6.6 per cent growth with 130.4 million passengers, the highest traffic handled for 12 months by the network," it said.

MIDF Amanah Investment Bank Bhd, in a research note on Tuesday, said MAHB's second quarter traffic performance should be better driven by higher international passengers and strong tourism sector.

"Despite the surprised change in government, we are comforted that the transition has been smooth throughout.

This should be a positive signal for a stable economic and political environment moving forward, leaving the tourism sector to benefit," it said.

Kenanga Investment Bank, in another note, said the anticipated Quality of Service (QoS) framework to be implemented by the Malaysian Aviation Commission (Mavcom) from the third quarter to achieve higher quality of service for passengers could pose as downside risk for MAHB.

The investment bank said Mavcom's proposal to impose a penalty of up to five per cent of aeronautical revenue could dent MAHB's financial year 2018 core net profit earning forecast by seven per cent for every one per cent penalty.

"That said, in order to mitigate penalties, MAHB has increased their planned capital expenditure to RM600-700 million between 2018 and 2019, from typically RM300 million, to upgrade their infrastructure," it added.

MIDF Amanah maintained a "Buy" call on MAHB and kept its target price at RM9.80 while Kenanga Investment retained an "Outperform" view and target price of RM8.45 on the airport operator. –Bernama


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