Oct 11, 2017 - STOCK INFO ... 3-mth Avg Daily Value ... MAHB's share price has corrected resulting from a major sharehol
11 October 2017 | Corporate Update
Maintain BUY
Malaysia Airports Holdings Berhad Taking a breather in September
Unchanged Target Price (TP): RM9.98
INVESTMENT HIGHLIGHTS •
A lull in September pax growth due to a lack of holidays
•
We expect October to register mid-single digit growth
•
Domestic capacity cuts at KLIA MTB gathered pace
•
ISG beginning to show more consistent growth
•
Maintain BUY with TP of RM9.98
September pax traffic at Malaysian airports grew +3.6%. Total pax traffic for the month of September came in at 7.8m, after two consecutive months (July and Aug) of pax traffic exceeding 8.3m. The
RETURN STATS Price (10 Oct 2017)
RM8.27
Target Price
RM9.98
Expected Share Price Return
+20.7%
Expected Dividend Yield
+1.5%
Expected Total Return
+22.2%
lower pax traffic in September could be due to a lull in travel demand following the KL2017 Sea Games and school holidays which took place a month prior. In addition, there were significant domestic capacity cuts at
STOCK INFO
KLIA MTB which contributed to the lower growth.
KLCI
We expect October to better. With growth in the mid-single digit
Bursa / Bloomberg
percentage growth likely, premised on China’s Golden Week which is its peak travel period and the F1 Grand Prix.
Board / Sector
1777.77 5014/MAHB MK Main/Trading Services
Syariah Compliant
No
of +9.4%yoy, above our +7.5%yoy pax growth forecast for FY17. As we
Issued shares (mil)
1,659.2
had anticipated, 2HFY17 growth would taper attributed to the higher base
Par Value (RM)
For 9MFY17, Malaysian airports recorded 71.3m pax, an increase 1.00
in 2HFY16, hence our +7.5yoy pax growth forecast. In the third quarter of 2017, pax traffic grew +6%yoy, below the +10%yoy and +13%yoy
Market cap. (RM’m)
growths experienced in 1QFY17 and 2QFY17 respectively.
Price over NA
Domestic capacity cuts by MAB and Malindo gathered pace. This
52-wk price Range
is reflected in a fall in domestic pax traffic at KLIA MTB which fell -
13,721.52 1.77 RM5.91 - RM9.45
Beta (against KLCI)
1.22
30%yoy in September (August: -21.5%yoy). AirAsia absorbed some of the withdrawn capacity, with KLIA2 domestic pax growth of +14.3%yoy recorded for September. International pax traffic, on the other hand,
3-mth Avg Daily Vol 3-mth Avg Daily Value
remained robust, registering a growth of +10.8%yoy.
2.71m RM23.4m
Major Shareholders
ISG showing consistent growth. Pax traffic grew +7.9%yoy with both its domestic and international segments performing well. Its international segment grew 9.5%yoy in September, with the summer travel period drawing tourists from the EU and Russia. Meanwhile, ISG’s domestic pax traffic returned to a growth of +7.1%yoy from flat growth in August, signalling a recovery in domestic travel appetite.
Khazanah
33.21%
EPF
11.22%
PNB
2.23%
MIDF RESEARCH is a unit of MIDF AMANAH INVESTMENT BANK Kindly refer to the last page of this publication for important disclosures
MIDF RESEARCH Wednesday, 11 October 2017
Maintain BUY with TP of RM9.98 based on our DCF model assuming WACC of 7.8% and Beta of 1.1. Of late, MAHB’s share price has corrected resulting from a major shareholder reducing some of its holdings. We believe this represents an opportunity for investors to accumulate MAHB shares. We like MAHB as a proxy to Malaysia’s resilient inbound/outbound travel industry, as the largest airport operator in Malaysia. MAHB received an extension of its operating agreement (OA) which will last until 2069, providing clarity to investors on its longer term prospects as an airport concessionaire. Meanwhile, the company has imposed onto itself a 1-year timeframe for negotiations with the Government on the terms and conditions for its OA extension.
INVESTMENT STATISTICS FYE Dec
FY15A
FY16A
FY17F
FY18F
FY19F
Revenue* (RM’ mn)
3,870.2
4,172.8
4,500.7
4,753.1
4,919.5
EBITDA (RM’mn)
1,679.1
1,709.9
1,520.3
1,682.2
1,726.9
EBIT (RM’mn)
777.5
857.4
694.3
883.1
918.3
Pretax Profit (RM’ mn)
41.8
183.3
504.3
693.1
728.3
Net Profit (RM' mn)
45.2
73.1
334.3
533.1
568.3
Core Earnings* (RM'm)
(11.5)
77.5
334.3
533.1
568.3
EPS (sen)
(0.7)
4.7
5.5
8.8
34.3
(102.2)
775.7
18.2
58.8
290.5
PER (x)
N/A
176.9
149.7
94.3
24.1
Net Dividend (sen)
8.5
10.0
12.0
12.0
13.0
Net Dividend Yield (%)
1.0
1.2
1.5
1.5
1.6
EPS growth (%)
Source: Company, MIDF Research
DAILY PRICE CHART
Tay Yow Ken, CFA
[email protected] 03-2173 8384 Source: Bloomberg
2
MIDF RESEARCH Wednesday, 11 October 2017
-5%
Monthly Malaysia pax (m)
9/17
8/17
7/17
6/17
5/17
4/17
3/17
2/17
1/17
12/16
11/16
9/16
10/16
8/16
-10% 7/16
5/16
4/16
3/16
2/16
1/16
6/16
-4%
0
0
Quarterly Malaysia pax (m)
-10% 3Q2017
0%
1
6% 4% 1% 0% -1%-1% -2% -3%
6%
4% 0%
3%2%
1Q2016
4%
9%
5% 5
5%
5%
10% 13% 10% 10% 10% 6% 0%
10
9%
8%
7%
30% 20%
23% 23% 19% 18%
4Q2015
9%
6%
11%
17
3Q2015
7%
3
10%
14%
13%
21 21 21 20 21 21
2Q2015
10%
15
22
1Q2015
14% 13%
4
20
21 21 20
2Q2017
17%
5
2
15%
22
1Q2017
6
20 20
4Q2016
20%
25
24 23 24 23 24
3Q2016
25%
4Q2014
7.3
6.7
40%
m
3Q2014
7.3
7
30
7.8
2Q2014
7.0
30%
8.3 8.3 7.6
1Q2014
7.3
8.1 8.2 7.9
7.8
7.3 7.5
4Q2013
6.9 6.9
7.6 7.5
3Q2013
7.9
2Q2013
8
8.8
m
1Q2013
9
Figure 2: Quarterly pax at Malaysian Airports
2Q2016
Figure 1: Monthly pax at Malaysian Airports
Quarterly Growth (yoy)
Monthy pax growth (yoy)
Source: Company, MIDFR
3
MIDF RESEARCH Wednesday, 11 October 2017
MIDF RESEARCH is part of MIDF Amanah Investment Bank Berhad (23878 - X). (Bank Pelaburan) (A Participating Organisation of Bursa Malaysia Securities Berhad)
DISCLOSURES AND DISCLAIMER This report has been prepared by MIDF AMANAH INVESTMENT BANK BERHAD (23878-X). It is for distribution only under such circumstances as may be permitted by applicable law. Readers should be fully aware that this report is for information purposes only. The opinions contained in this report are based on information obtained or derived from sources that we believe are reliable. MIDF AMANAH INVESTMENT BANK BERHAD makes no representation or warranty, expressed or implied, as to the accuracy, completeness or reliability of the information contained therein and it should not be relied upon as such. This report is not, and should not be construed as, an offer to buy or sell any securities or other financial instruments. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. All opinions and estimates are subject to change without notice. The research analysts will initiate, update and cease coverage solely at the discretion of MIDF AMANAH INVESTMENT BANK BERHAD. The directors, employees and representatives of MIDF AMANAH INVESTMENT BANK BERHAD may have interest in any of the securities mentioned and may benefit from the information herein. Members of the MIDF Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein This document may not be reproduced, distributed or published in any form or for any purpose.
MIDF AMANAH INVESTMENT BANK : GUIDE TO RECOMMENDATIONS STOCK RECOMMENDATIONS BUY TRADING BUY NEUTRAL SELL TRADING SELL
Total return is expected to be >15% over the next 12 months. Stock price is expected to rise by >15% within 3-months after a Trading Buy rating has been assigned due to positive newsflow. Total return is expected to be between -15% and +15% over the next 12 months. Total return is expected to be 15% within 3-months after a Trading Sell rating has been assigned due to negative newsflow.
SECTOR RECOMMENDATIONS POSITIVE
The sector is expected to outperform the overall market over the next 12 months.
NEUTRAL
The sector is to perform in line with the overall market over the next 12 months.
NEGATIVE
The sector is expected to underperform the overall market over the next 12 months.
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MIDF RESEARCH Wednesday, 11 October 2017
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