RHB upgrades MAHB to buy, TP increased to RM8.15


Pic taken from MAHB Facebook

KUALA LUMPUR: RHB research has upgraded Malaysia Airports Holdings Bhd to a buy recommendation with a higher target price of RM8.15 from RM7.16 previously.

Following a better-than-expected quarterly earnings announcement on Friday, RHB said investors should accumulate shares in the airport operator at its current trough level.

The research house raised its FY19-21F earnings by 6-9%, lowering costs related to staff, maintanence and administration.

To recap, MAHB's 1QFy19 core net profit of RM147mil came in within 29% of and 28% of RHB's and consensus annual estimates.

The research house aded MAHB's core EBITDA improved 35% quarter-on-quarter to RM566mil due to a significant reduction in costs.

"Note that operating expenditure has been reduced by 23% QoQ to MYR481m while direct cost was lower by 8% QoQ to MYR200m. 

"We gather that for its Malaysia operation, cost has been reduced for staff, maintenance and administrative costs," it said.

The research house believes the current market price includes most of the negative news and concerns on MAHB while taking note of the ongoing concerns on the impact from the departure levy, RAB framework and court cases with airline operations on the TRY depreciation.
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