MAHB to benefit from upgrades as borders reopen

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KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) is properly ready for a pick-up in enterprise after having taken the chance to improve its operations in the course of the 2020 lockdown interval.

As the nation’s borders reopen and air journey makes a robust restoration, the airports operator is anticipated to benefit from the lowered price construction and industrial reset programme applied in the course of the pandemic, stated Hong Leong Investment Bank (HLIB) analysis.

“Various prices containment measures had been applied with core price discount of -32.9% in FY21 (vs FY19) and administration will stay cautious on opex in FY22.

“Management guided potential prices financial savings of greater than RM50mil yearly beneath the Cooling Energy Supply JV with TNB (efficient Jul 2021),” it stated in a report.

Meanwhile, the industrial reset program, which has been applied since FY20, reconfigures the combo of retailers and will increase general retail house by about 10%, which is anticipated to see outcomes with the rise passenger motion and new airport buying experiences.

Over on the group’s Istanbul Sabiha Gokcen International Airport (ISGA), there was additionally a robust rebound in passenger motion in 2HFY21 as Turkey reopened its nationwide borders and allowed tourism.

It added {that a} newly contracted duty-free operator Dufry since 4QFY20 is anticipated to present stronger earnings upside to the airport with the passenger restoration in FY22.

On valuations, HLIB expects MAHB to return to pre-pandemic ranges of RM8 to RM8.50 a share by end-2022 or early-2023.

“We take notice that MAHB is now weaker stability sheet sensible, with increased internet gearing stage of 74.8% at finish FY21 (vs 40.7% at finish FY19) as administration shored up liquidity and restructured mortgage repayments with reported losses in the course of the pandemic in FY20-21.

“Nevertheless, we deem the web gearing stage remains to be manageable and anticipate MAHB to cut back its internet gearing again to 43.8% by finish FY24,” it stated.

HLIB expects decrease losses in FY22 of RM17.8mil and a turnaround to revenue in FY23 to RM596.5mil

It maintained “purchase” on MAHB with a better goal worth of RM8.05.



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