TA Research said airline companies would continue to add seat capacity, which augurs well for MAHB.
PETALING JAYA: Malaysia Airports Holdings Bhd
(MAHB) is set to benefit from rising demand for air travel from China and Malaysia, according to TA Research.
In a note, the research house said airline companies would continue to add seat capacity which augurs well for MAHB.
It also revised MAHB’s target price to RM8.20 a share from RM7.85 after lowering its capital asset pricing model to 14.4% from 14.9% through updating the stock’s beta.
It maintained a “buy” call for the group.
“For MAHB’s share price performance, it rallied 12.8% in 2023, which also resulted in it being a top pick for last year,” it said.
TA Research said throughout 2023, the Employees Provident Fund had reduced its stake in MAHB to 6% at end-December from 15.7% in early 2023, while the Retirement Fund Inc had raised its stake marginally to 7.2% at end-December from 6.3% early 2023.
The group’s total foreign shareholding increased from 21% in January to 26.4% as of September 2023.
MAHB recorded 6.6 million movements for its Malaysian operations in November 2023, an increase of 27.4% year-on-year, but down 2.9% month-on month.
“This would likely be the second lowest volume in 2023 as November is usually the off-peak travelling season.
“Having said that, the growth in international traffic remained robust, offsetting the seasonal weakness in domestic traffic,” it said.
The reduction in domestic traffic was due to increased allocation of seat capacity to the international sector for higher fare and better yield by airlines.
It contracted 6.3% month-on-month to 3.2 million movements, slipping to 75% of 2019 pre-pandemic levels.
“According to management, the average load factor for the domestic sector in November recorded above 80% for the second consecutive month, with the airline’s seat capacity offered at 66% of pre-pandemic levels,” the research house noted.
It added for the 11 months of 2023, the growth in cumulative passenger movements in Malaysia moderated to 61.2% from 65.6% in December 2023 to 74.1 million.
“It accounted for 89.1% of our full-year forecast (90 million) and we attribute this lower-than expected volume to lower-than-estimated flight capacity for 2023,” it said.
However, there was continuous traffic growth in November due to the introduction of new services from the Kuala Lumpur International Airport to the United Arab Emirates.
Additionally, Firefly commenced five weekly flights to Don Mueang International Airport from Penang International Airport.
Meanwhile, the international sector registered a total passenger movement of 3.4 million in November, which showed a steady recovery to 78% of 2019 levels.
The main driver for this was the non-Asean sector.
As for the Istanbul Sabiha Gokcen International Airport (ISG), passenger movements in November 2023 were recorded at three million, a decrease of 10.4% month-on-month.
“This was underpinned by weaker international and domestic traffic seasonally during the winter.
“Cumulatively, ISG’s 11-month total passenger movements grew 21% to 34.4 million on the back of decent growth in both international (25.7%) and domestic (16.2%) traffic.”
