MORNING CALL: 15/9/23

CGS-CIMB Research says exciting times are set to return for Malaysia Airports Holdings

Transcript

00:00 Malaysia Airports Holdings or MAHB is outstruck in focus this morning.

00:06 CJSC IMB Research, upgrading the counter from whole to add,

00:10 it also hiked its target price to RM7.76 from RM7.19.

00:15 MAHB ended trading yesterday at RM7.28.

00:19 In its note, the research house said the rental waivers and discounts that MAHB

00:24 has been offering to its tenanted commercial lots are slated to end in FY24.

00:29 As a result, CJSC IMB forecasts rental and commercial revenues to improve to

00:34 RM560.9 million in FY23 and RM782 million in FY24.

00:42 As for the second half of this year, it expects strong results due to

00:46 continuing passenger traffic recovery, stronger commercial rental collections

00:50 and higher Iraman duty-free sales.

00:53 The society also sees potential positive catalysts over the next four months

00:58 from the new operating agreement that's set to be signed by the end of the year.

01:02 Meanwhile, MAVCOM should be releasing its third consultation paper on aviation

01:07 service charges by the end of this month.

01:09 CJSC IMB says investors may be positively surprised by possibly higher tariff

01:15 increases for aircraft landing and parking charges from January 1, 2024.

01:21 The government will also be assisting MAHB in its CAPEX spending programs

01:25 through its Airport Development Fund in FY24.

01:28 Now what does the street say?

01:30 According to Bloomberg data, there are 13 buys, 5 holds and 1 sell,

01:34 with target prices averaging out to RM8.3.

01:38 MAHB closed at RM7.28 yesterday, so that's a potential return of some 10%.

01:44 [Music]