Stock Name: AIRPORT
Company Name: MALAYSIA AIRPORT HOLDINGS BHD
Research House: MAYBANK
Malaysia Airports Holdings Bhd
(Feb 14, RM6.03)
Maintain buy at RM6.02 with target price of RM7.12: MAHB will release its 4Q10 results on Feb 16. The last quarter of the calender year is seasonally the best. Based on the operating statistics published, we expect recurring net income of RM154 million (11.9% year-on-year, 63.4% quarter-on-quarter) ' this is MAHB's best quarter ever. MAHB is our top aviation pick as it is well placed to enjoy the current air travel upcycle. Maintain 'buy', no change to our RM7.12 discounted cash flow-based target price.
Passenger growth in 4Q10 was 6.5% y-o-y, lower than our 10% growth assumption as the industry was negatively impacted by the severe snowstorms in the northern hemisphere.
The bulk of the traffic growth came from international passengers (12% y-o-y) while domestic grew by 1.8% y-o-y. This will have a very positive impact on the group as international passengers command four to seven times higher passenger service charge.
MAHB's 2010 passenger traffic growth rate of 12.7% was the second highest after the record 15.5% growth set in 2004. However, 2004's results were distorted because of the previous years' poor showing due to 9/11 and SARS. 2010's result is compelling because it was achieved on the back of robust traffic growth of the previous three years.
KLIA carried 34.1 million people in 2010. We estimate this makes it the 32nd busiest airport in the world, surpassing big names such as Narita Japan and Newark USA. More impressive, KLIA's growth of 14.8% makes it the fourth fastest growing large airport (more than 30 million passengers carried per year) after Pudong, Jakarta and Dubai. Overseas bound passengers consist of 48.4% of the total, an increase of 3.5 percentage points from the previous year.
We have tweaked numbers by +0.6%, 1.1% and 1.2% for 2010/12 respectively, after imputing the published operating statistics. MAHB is highly attractive compared with its global peers: 8.1 times price-to-cash-flow ratio (P/CFO), a 24% discount to peers, 110% return on capital (53% higher) and it is not highly geared at 0.26 times against its peers' average of 0.74 times. ' Maybank IB Research
This article appeared in The Edge Financial Daily, February 16, 2011.
Company Name: MALAYSIA AIRPORT HOLDINGS BHD
Research House: MAYBANK
Malaysia Airports Holdings Bhd
(Feb 14, RM6.03)
Maintain buy at RM6.02 with target price of RM7.12: MAHB will release its 4Q10 results on Feb 16. The last quarter of the calender year is seasonally the best. Based on the operating statistics published, we expect recurring net income of RM154 million (11.9% year-on-year, 63.4% quarter-on-quarter) ' this is MAHB's best quarter ever. MAHB is our top aviation pick as it is well placed to enjoy the current air travel upcycle. Maintain 'buy', no change to our RM7.12 discounted cash flow-based target price.
Passenger growth in 4Q10 was 6.5% y-o-y, lower than our 10% growth assumption as the industry was negatively impacted by the severe snowstorms in the northern hemisphere.
The bulk of the traffic growth came from international passengers (12% y-o-y) while domestic grew by 1.8% y-o-y. This will have a very positive impact on the group as international passengers command four to seven times higher passenger service charge.
MAHB's 2010 passenger traffic growth rate of 12.7% was the second highest after the record 15.5% growth set in 2004. However, 2004's results were distorted because of the previous years' poor showing due to 9/11 and SARS. 2010's result is compelling because it was achieved on the back of robust traffic growth of the previous three years.
KLIA carried 34.1 million people in 2010. We estimate this makes it the 32nd busiest airport in the world, surpassing big names such as Narita Japan and Newark USA. More impressive, KLIA's growth of 14.8% makes it the fourth fastest growing large airport (more than 30 million passengers carried per year) after Pudong, Jakarta and Dubai. Overseas bound passengers consist of 48.4% of the total, an increase of 3.5 percentage points from the previous year.
We have tweaked numbers by +0.6%, 1.1% and 1.2% for 2010/12 respectively, after imputing the published operating statistics. MAHB is highly attractive compared with its global peers: 8.1 times price-to-cash-flow ratio (P/CFO), a 24% discount to peers, 110% return on capital (53% higher) and it is not highly geared at 0.26 times against its peers' average of 0.74 times. ' Maybank IB Research
This article appeared in The Edge Financial Daily, February 16, 2011.
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