March 23, 2010

MAS - Price Target News

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
Research House: CIMB

KUALA LUMPUR: Shares of MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) rose to a high of RM2.02 in early trade on Tuesday, March 23 after CIMB Equities Research turned bullish on the national carrier and accorded a target price of RM3. At 9.55am, it was up seven sen to RM2 with 2.19 million shares done. CIMB Research turned bullish on MAS because (1) the rights issue is finally over and the stock remains depressed, lagging behind regional peers while analysts are almost universally bearish on MAS, unlike regional airlines for which the majority of calls are buys. It added the other positive factors for MAS were the macroeconomic environment is improving, as evidenced by Singapore Airlines' strong results for the December quarter and the major fleet renewal programme should contribute to significant unit cost reduction from 2011. "We are upgrading MAS from Underperform to OUTPERFORM, with a target price of RM3 (6x CY12 core EPS), revised from RM1.95 (2x adjusted NTA). Potential rerating catalysts include analysts' upgrades, improved results in 2010 from the global yield recovery, and a structural reduction in the airline's unit cost from 2011 onwards," it said.

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