One Buy One
Airports MALAYSIA
October 1, 2012
Malaysia Airports Holdings
MAHB MK / MAHB.KL Current RM5.56 RM6.75 RM5.90 21.4%
Conviction
COMPANY NOTE
SHORT TERM (3 MTH) LONG TERM
Market Cap
Avg Daily Turnover
Free Float
Target Previous Target Up/downside
US$2,199m
RM6,728m
US$0.75m
RM2.34m
29.0%
1,210 m shares
Notes from the Field
Flying with the winged Lion
Malindo Airways’ unexpected entry into Malaysian skies is a positive surprise and will benefit MAHB by boosting passenger and aircraft traffic growth from 2013 onwards. Our base case is that KLIA2 will be completed on time and within the RM3.6bn-3.9bn budget.
We upgrade MAHB from Neutral to Outperform as the stock has underperformed by 13% over the past year and could be catalysed by the completion of KLIA2 and Malindo’s surprise entry. The latter leads to a higher DCF, against which we factor in a new 10% discount to derive our end-2013 target price until KLIA2 completion risks pass. Our FY12-13 EPS are cut for higher staff costs. 3.9% to 5.3% to account for Malindo's entry into Malaysia. We are only assuming that Malindo expands to 70 aircraft over 10 years on the basis of rational behaviour, allowing KLIA2 to hit 70% utilisation by 2017 and 95% utilisation by 2022. The strong passenger traffic flow will improve the commercial attractiveness of KLIA2, with possibility of further rental hikes. Should Malindo expand to 100 planes in a decade, as per the official business plan, there would be potential upside to our current traffic forecasts.
Raymond Yap CFA
T (60) 3 20849769 E raymond.yap@cimb.com
Company Visit Channel Check
Expert Opinion Customer Views
“The project [KLIA2] is on track for completion. We're just the contractor. Any commitments have to come from MAHB."
Datuk Izzaddin Idris, CEO, UEM Group
KLIA2 on track?
Despite doubts publicly aired by AirAsia, MAHB insists that KLIA2 should be on track for opening in April 2013 though construction works could
October 1, 2012
Malaysia Airports Holdings
MAHB MK / MAHB.KL Current RM5.56 RM6.75 RM5.90 21.4%
Conviction
COMPANY NOTE
SHORT TERM (3 MTH) LONG TERM
Market Cap
Avg Daily Turnover
Free Float
Target Previous Target Up/downside
US$2,199m
RM6,728m
US$0.75m
RM2.34m
29.0%
1,210 m shares
Notes from the Field
Flying with the winged Lion
Malindo Airways’ unexpected entry into Malaysian skies is a positive surprise and will benefit MAHB by boosting passenger and aircraft traffic growth from 2013 onwards. Our base case is that KLIA2 will be completed on time and within the RM3.6bn-3.9bn budget.
We upgrade MAHB from Neutral to Outperform as the stock has underperformed by 13% over the past year and could be catalysed by the completion of KLIA2 and Malindo’s surprise entry. The latter leads to a higher DCF, against which we factor in a new 10% discount to derive our end-2013 target price until KLIA2 completion risks pass. Our FY12-13 EPS are cut for higher staff costs. 3.9% to 5.3% to account for Malindo's entry into Malaysia. We are only assuming that Malindo expands to 70 aircraft over 10 years on the basis of rational behaviour, allowing KLIA2 to hit 70% utilisation by 2017 and 95% utilisation by 2022. The strong passenger traffic flow will improve the commercial attractiveness of KLIA2, with possibility of further rental hikes. Should Malindo expand to 100 planes in a decade, as per the official business plan, there would be potential upside to our current traffic forecasts.
Raymond Yap CFA
T (60) 3 20849769 E raymond.yap@cimb.com
Company Visit Channel Check
Expert Opinion Customer Views
“The project [KLIA2] is on track for completion. We're just the contractor. Any commitments have to come from MAHB."
Datuk Izzaddin Idris, CEO, UEM Group
KLIA2 on track?
Despite doubts publicly aired by AirAsia, MAHB insists that KLIA2 should be on track for opening in April 2013 though construction works could