CIMB maintains Hold on MAHB


  • Analyst Reports
  • Monday, 13 Apr 2015

KUALA LUMPUR: CIMB Research has maintained its Hold call on MAHB with a targe price of RM7.45, as the outlook forMAHB’s Malaysian business is weak, though Turkey is doing better than expected. 

In a note on Monday, CIMB said 2015 is unlikely to be a fabulous year for MAHB’s Malaysian operations.

Passenger traffic growth in Malaysia should remain subpar this year due to MAS’s intention to cut capacity by 10%, AIRASIA's plan to defer new aircraft deliveries and deploy more aircraft overseas, and AAX's decision to scale down growth. 

Only Malindo is expected to grow strongly, but this airline still has a relatively small base of traffic, it said.

It added that costs are also expected to rise in FY15, largely due to a full-year's recognition of KLIA2-related operating, depreciation and interest costs. MAHB only recognised eight months of KLIA2-related costs in FY14.

"The outlook for earnings in FY15 is weak for MAHB, as we are expecting the overall group core net profit to fall from RM194mil in FY14 to RM180mil in FY15, a decline of 7.2%. 

"We expect the Malaysian core net profit to fall 33% yoy, but this will be partially offset by the ISG’s return to profitability, with the net effect still down yoy on a group-wide basis," it noted.
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