Stock Name: AIRPORT
Company Name: MALAYSIA AIRPORT HOLDINGS BHD
Research House: HWANGDBS
KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) has upgraded its sum-of-parts derived target price to RM6.15 (from RM4.75) after fine-tuning FY10F-11F earnings upwards by 3%. It said on Wednesday, April 14 it had also factored in additional rental space at the new LCCT and valuation for the land development project. "We expect under-utilisation of new LCCT when it is completed in 2012. However, AirAsia's strong fleet expansion should boost utilization in subsequent years. We believe the stock should be valued based on its long-term earnings potential from its cash rich airport concession, land development, and new LCCT," it said. Hwang DBS Vickers Research said in its opinion, potential value from new LCCT and development potential around KLIA has not been fully priced in. It added the and near KLIA offers huge development potential. The project, known as "KLIA Aeropolis", will transform KLIA into a multi-functional airport city similar to some major international airports e.g. Incheon in South Korea and Schiphol in The Netherlands. "It adds 88 sen (DCF-based) to our TP assuming leasing of additional 5-10% of lettable area at RM41 per sq m per year with 10% increase every 3 years, starting from 2013 onwards (vs marginal holding cost of c.5.6sen per sq m per year). "Our forecast excludes potential revenue sharing or contribution from joint ventures with developers, which could further drive revenue upwards," it said.
Company Name: MALAYSIA AIRPORT HOLDINGS BHD
Research House: HWANGDBS
KUALA LUMPUR: Hwang DBS Vickers Research (HDBSVR) has upgraded its sum-of-parts derived target price to RM6.15 (from RM4.75) after fine-tuning FY10F-11F earnings upwards by 3%. It said on Wednesday, April 14 it had also factored in additional rental space at the new LCCT and valuation for the land development project. "We expect under-utilisation of new LCCT when it is completed in 2012. However, AirAsia's strong fleet expansion should boost utilization in subsequent years. We believe the stock should be valued based on its long-term earnings potential from its cash rich airport concession, land development, and new LCCT," it said. Hwang DBS Vickers Research said in its opinion, potential value from new LCCT and development potential around KLIA has not been fully priced in. It added the and near KLIA offers huge development potential. The project, known as "KLIA Aeropolis", will transform KLIA into a multi-functional airport city similar to some major international airports e.g. Incheon in South Korea and Schiphol in The Netherlands. "It adds 88 sen (DCF-based) to our TP assuming leasing of additional 5-10% of lettable area at RM41 per sq m per year with 10% increase every 3 years, starting from 2013 onwards (vs marginal holding cost of c.5.6sen per sq m per year). "Our forecast excludes potential revenue sharing or contribution from joint ventures with developers, which could further drive revenue upwards," it said.
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