Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
Research House: KENANGA
Kenanga is maintaining its "hold" stock rating on Malaysia Airlines (MAS) with a target price of RM1.69.
The research firm notes that MAS first quarter net profit of RM253 million was ahead of "our expectations and consensus".
It upgraded its forecast on MAS by narrowing down the losses by 51 per cent to RM360.6 million from RM744.9 million.
"We have imputed in better yield for cargo segment and lower down the operating cost," Kenanga says.
"Our TP is based on the price-to-sales at 0.44x at FY10."
However, Kenanga is cautious on the outlook for FY10 outlook for MAS as 2Q10 earnings could be hit by volcanic ash in Europe despite of weak industry recovery.
Meanwhile, Malaysia Airlines is rated "outperform" at CIMB with a target price of RM3.00.
MAS incurred a 1Q10 core net loss of RM224 million, which, annualised, works out to 13 per cent below the full-year loss forecast of RM1,026 million, says CIMB.
"However, we consider this to be broadly in line as the seasonally stronger 2H may be offset by potentially higher jet fuel prices," it added.
The core net loss narrowed from RM793 million in 1Q09 and also from a loss of RM287m in 4Q09.
Despite the rising jet fuel price, MAS achieved a lower loss on the back of year-on-year and quarter-on-quarter improvement in cargo profits as well as narrower passenger losses on year-on-year basis.
Company Name: MALAYSIAN AIRLINE SYSTEM BHD
Research House: KENANGA
Kenanga is maintaining its "hold" stock rating on Malaysia Airlines (MAS) with a target price of RM1.69.
The research firm notes that MAS first quarter net profit of RM253 million was ahead of "our expectations and consensus".
It upgraded its forecast on MAS by narrowing down the losses by 51 per cent to RM360.6 million from RM744.9 million.
"We have imputed in better yield for cargo segment and lower down the operating cost," Kenanga says.
"Our TP is based on the price-to-sales at 0.44x at FY10."
However, Kenanga is cautious on the outlook for FY10 outlook for MAS as 2Q10 earnings could be hit by volcanic ash in Europe despite of weak industry recovery.
Meanwhile, Malaysia Airlines is rated "outperform" at CIMB with a target price of RM3.00.
MAS incurred a 1Q10 core net loss of RM224 million, which, annualised, works out to 13 per cent below the full-year loss forecast of RM1,026 million, says CIMB.
"However, we consider this to be broadly in line as the seasonally stronger 2H may be offset by potentially higher jet fuel prices," it added.
The core net loss narrowed from RM793 million in 1Q09 and also from a loss of RM287m in 4Q09.
Despite the rising jet fuel price, MAS achieved a lower loss on the back of year-on-year and quarter-on-quarter improvement in cargo profits as well as narrower passenger losses on year-on-year basis.
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