MAS - 1Q14 loss-making as expected

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: ALLIANCE

Price Call: SELL

Target Price: 0.16

MAS - Turnaround even more challenging with the MH370 episode

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: SELL

Target Price: 0.18

MAS - Continued loss as yield compressed further

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: SELL

Target Price: 0.27

MAS - No plan to slow capacity expansion despite the bleeding

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: SELL

Target Price: 0.27

MAS - Degradation of ticket yield base

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: SELL

Target Price: 0.27

MAS - No easy turnaround

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: SELL

Target Price: 0.27

Rights structure not attractive to minorities

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: HOLD

Target Price: 0.78

Breaking even with higher load factor

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: HOLD

Target Price: 0.78

Affin upgrades MAS to 'reduce'

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: AFFIN

Price Call: TRADING SELL

Target Price: 0.64

Affin Investment Bank upgraded Malaysian Airline System Bhd to 'reduce' from 'sell', saying the national carrier's tough operating environment and its financing risk have largely been reflected in its weak share price.

"Over the last three months, Malaysian Airline's share price has fallen by more than 30 per cent following the proposal of yet another capital raising exercise," Affin said in a research note on Tuesday.

Affin said it expects Malaysian Airline to post positive earnings before interests, tax, depreciation and amortisation in the fourth quarter of 2012, but that it will still be a red bottom line. It said, however, the loss could be narrower because of a "moderating operating statistic performance coupled with a flattish jet fuel price."

Affin kept its target price at 64 sen per share on the counter and did not change its earning forecast for Malaysian Airline.

The counter dropped 0.72 per cent to 69 sen per share, while the benchmark index rose 0.07 per cent. -- Reuters

MAS - New Order of 36 Turboprops

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: HOLD

Target Price: 1.02

Recapitalisation exercise to concrete turnaround plan

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: HOLD

Target Price: 1.02

OSK raises MAS to 'buy'

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: OSK

Price Call: BUY

Target Price: 1.38

OSK Research raised its call on Malaysian Airline System Bhd (MAS) to 'buy' from 'trading buy', citing a brighter outlook for the national carrier as its second-quarter losses narrowed by 72 percent year-on-year.

"While there is still a lot more that needs to be done to bring in consistent profits, we see sentiment turning more positive for the counter as the carrier undergoes a turnaround, slowly but steadily," OSK said in a note on Thursday.

Keeping its fair value at 1.38 ringgit per share, OSK said MAS has successfully trimmed costs across all levels and that arrival of new aircraft will reduce fuel consumption.

As of 3.10pm, Malaysian Airlines shares rose 0.93 percent to 1.08 ringgit against the Malaysian benchmark index's 0.06 percent fall. - Reuters

MAS - Bleeding has eased

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: MIDF

Price Call: HOLD

Target Price: 1.16

Benefiting from softening fuel prices

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: TA

Price Call: HOLD

Target Price: 1.23

Issuance of Perpetual Sukuk

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: TA

Price Call: SELL

Target Price: 1.10

Value Investor Research on KLSE Market

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: ECMLIBRA

Price Call: TRADING BUY

Target Price: 1.00

Target Price: RM1.00

Malaysian Airline System (MAS)'s Redeemable Cumulative Preference Shares (RCPS) have been sold down on heavy volume since February 2012. The RCPS are to be redeemed at RM1.00 in November 2012 which would give an annualized return of 18%. Uncertainty over whether the RCPS will be fully redeemed is to be addressed by a formal announcement by MAS towards the end of this month. With the ordinary shares trading way above NAV/share, and the RCPS trading at a discount to redemption value when the RCPS have priority over the ordinary shares in receiving payment, the RCPS look like a better bet than the ordinary shares. Trading Buy. (refer to report for details)

Source: ECM Newz Bits 06 April 2012, Full PDF Report

MAS (FV RM0.90 - SELL) Corporate News Flash: Ditches Plan For Premium Airline

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: OSK

Price Call: SELL

Target Price: 0.90

THE BUZZ

Malaysia Airlines (MAS) has scrapped its plan for a regionalpremium airline but is going ahead with its short-haul operations. The nationalcarrier said yesterday the decision to drop the premium airline plan was partof a business model review. MAS group deputy chief executive officer MohammedRashdan Mohd Yusof will no longer head the shorthaul operation. MAS said thebusiness plan it unveiled last December was very much intact and no otherchanges have been made.

OUR TAKE

As anticipated.  We are not surprised with  this piece of  news following the  national carrier's failure to  seal a partnership with Qantas to set up aregional premium airline.  Furthermore,given the likelihood of a downgrade in its Skytrax rating, this would have putMAS in an even more difficult position to sell the premium concept. 

Maintain SELL.  We make no changes to our earnings estimatesas we have not factored in  the potentialsetting  up of the  proposed regional premium airline.  We maintainour SELL call on MAS, with our FV unchanged at RM0.90, based  on an EV/EBITDA of 8x FY13. Our greatestconcern is how much cash burn to expect in the immediate term since the airlinehas just one and a half months to finalize plans to raise funds and strengthenits balance sheet. We see an equal chance of the carrier calling for a rightsissue or issuing a sukuk debt as its credit facilities dry up.

Source: OSK188

Transportation & Logistic - Neutral - 28 March 2012

Stock Name: AIRASIA
Company Name: AIRASIA BHD

Research House: KENANGA

Price Call: BUY

Target Price: 4.06

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: KENANGA

Price Call: SELL

Target Price: 1.06

Stock Name: MISC
Company Name: MISC BHD

Research House: KENANGA

Price Call: HOLD

Target Price: 5.47

Stock Name: BIPORT
Company Name: BINTULU PORT HOLDINGS BHD

Research House: KENANGA

Price Call: HOLD

Target Price: 7.00

We are maintaining our Neutral rating on the Transportationsector while maintaining Bintulu Port as our top pick for a defensive stanceduring the current uncertain global economic outlook. We believe that BintuluPort would be able to maintain at least a 37.5 sen dividend  (6% dividend yield) throughout the constructionof Samalaju Port. With the  potentialearnings diversification from Samalaju Port, Bintulu Port will be the  port of call for industrial products supportedby steady LNG vessels volume.  Meanwhile,for airlines, the headwinds from high oil prices and low loads will remainstrong in 2Q12. On top of that, with the lingering controversy on the sharesswap deal between MAS (UP, TP: RM1.06) and AirAsia (OP, TP: RM4.06), this willbring greater uncertainties in the near term for the deal and especially forMAS' business direction. For the shipping sector, we are still Neutral on thesector but we have upgraded our call on MISC from an Underperform to a MarketPerform with a Target Price of RM5.47 on account of lower downside risks to thestock in the near-term. 

Mixed bag of FY11results.  Thus far, most of thetransportation and logistics companies under our coverage have had their FY11earnings coming in within our expectations except for MISC and MAS. We aremaintaining our UNDERPERFORM rating on MISC and MAS as we believe bothcompanies' earnings will continue to be subdued throughout the year. Both companieshave reported higher than expected losses due mainly to their high operating costand lower revenue. 

Low season forairlines in 2Q12. We are not bullish on the airline sector at this junctureas 2Q is generally the low season for airlines especially AirAsia. For MAS, wedo not expect it to turn profitable in FY12 as we believe that there are stillrooms for further 'kitchen sinking' exercise on its aircrafts early redelivery.This will eventually increase its operating cost. We expect more news flow onMAS-AirAsia shares swap and the delivery of MAS's new A380s but this will notlikely help the sentiment on the share price due to the expectation of FY12 losses.In a nutshell, 2Q12 will be a crucial period for MAS to secure financing for the deliveries of its aircraftsi.e. A380s given that its cash balance is at a critical level of RM550m. 

Bigger picture forBintulu Port. For a longer term investment stance, we are positive on BintuluPort due to its potential earnings upside from Samalaju Port once it is completedin about 3 years' time. Even on a shorter term outlook, its consistent dividendpayout will be attractive to investors looking to weather the economicuncertainties. As for its dividends, we believe that the potential CAPEX forSamalaju  Port will not affect BintuluPort's dividend payout as 30% to 40% of the CAPEX (RM500m) will be financed bythe government through a government grant. Based on our analysis, Bintulu Portwill be able to pay at least a 37.5sen dividend throughout the constructionperiod of about 3 years. 

Shipping tounderperform still. With the uncertainties in the US and global economy, weexpect the shipping sector to be gloomy in the near term. Rates for dry andliquid bulk are expected to be lacklustre and temporary hiccups are expected asthe overcapacity issue for vessels remains a  concern. As  such, we have downgraded our TP on MISC  to RM5.47 (from RM6.05) as we have fine-tuned our valuation for its businesssegments and remove the earnings of the liner business. However, given  that the price of the stock has retraced to levelseven lower than our revised TP (offering a  current  6.1% upside  to  the TP),  we  are upgrading our call on MISC to a MarketPerform (from an Underperform).

We are maintainingour NEUTRAL recommendation for the sector for 2Q12.  Our Top Sell for the sector is MAS (UP, TP:RM1.06) and our defensive pick is Bintulu Port (MP, TP: RM7.00). Some of thekey areas of concern for the sector for 2Q12 are (1) high oil prices, (2) aseasonally low season and (3)  uncertainand unsustainable global economic recovery in the near term. 

Source: Kenanga 

MAS (SELL) - February Stats

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: HLG

Price Call: SELL

Target Price: 0.82

MAS (SELL)

February Stats

• MAS released February statistics showing continued weakness in passengerand cargo demand, largely in line with our forecast.
• With the reported weak statistics, the survivability of MAS within 1H12remained as a major concern, as the expected losses will eat up its existingcash piles of RM1bn (as at Dec 2011), while debt level remained high atRM5.7bn.
• High possibility of cash call exercise to strengthen balance sheet, fundaircraft delivery and restructuring cost.
• Separately, AirAsia X entered Re-Accommodation Agreement with MAS forits affected passengers following the suspension of services to Mumbai, New Delhi, London and Paris. The deal willcontribute RM51.6m revenue to MAS or 0.4% of MAS FY12 revenue.
• Maintain Sell with unchanged Target Price of RM0.82.

 Source: HLIB Research - 28 March 2012

Malaysian Airline - Walking a tight rope HOLD

Stock Name: MAS
Company Name: MALAYSIAN AIRLINE SYSTEM BHD

Research House: AMMB

Price Call: HOLD

Target Price: 1.25

We maintain our HOLD rating on Malaysia Airlines (MAS) withan unchanged fair value of RM1.25/share, following the release of its 4Q11results. Our valuation continues to peg MAS at 0.9x FY12F book value ofRM1.38/share.

 MAS reported a netloss of RM1.3bil for 4Q11, which brought the full-year net loss to RM2.5bil.The results were dragged by some RM1.09bil provisions comprising: (1) RM602milfor redelivery of aircraft; (2) RM314mil of impairment of freighters (2 B747Fand 4 A330F); (3)RM179mil provision for stock obsolescence. 

Excluding these provisions, MAS would have reported a corenet loss of RM1.3bil, which was in line with our estimate of a RM1.28bil netloss for FY11, but slightly deeper than consensus' projected net loss ofRM1.2bil. 

Management explained that the huge provisions for aircraftre-delivery was due to an accelerated return of 58 aircraft to lessors betweenFY12-14, of which 34 are expected to be returned in 2012. 

Core operating results were poor in 4Q11. The core net lossof RM232mil compares poorly against a RM60mil core net profit in 4Q10. Whileyields rose 9% YoY, the main drag came from a sharp drop in load factor to72.5% (4Q10: 77.4%), reflecting MAS's weak pricing power. Pax traffic droppedsome 6% YoY, while ASK was more or less flattish. 

Operating outlook looks tough in our opinion, as jet fuel priceremains high (currently hovering circa US$135/barrel). Our current projectionsalready assume jet fuel to average at circa US$130/barrel. An every US$1 increasewill reduce earnings by 9%. 

On top of this, we see the risk of a cash call looming. MAS isexpected to take delivery of five A380s this year (we estimate capex of circaRM3.1bil), with the maiden  two deliveriesin 1H12. A tough operating outlook (1Q and 2Q are typically weakest for MAS),coupled with dwindling cash balance of RM1bil, suggests that the group may be requiredto recapitalise to honour aircraft deliveries. Management is looking at severaloptions, including sale of non-core assets and debt-raising, but does not ruleout coming to the market, though equity would be the most expensiveoption. 

From a valuation standpoint, MAS is not cheap, trading at 1xFY12F book value of RM1.38/share, which is at par to more established airlines;Singapore Airlines and Cathay Pacific. We suggest investors switch out of MASinto AirAsia (BUY, FV: RM4.20/share) for exposure to the Malaysian aviationsector.

Source: AmeSecurities