6 June 2013
The research house pointed out that KLIA was in fact the fastest growing Asia-Pacific airport in the first quarter 2013 and was likely to remain so for the rest of 2013.
Additionally, it said many international airlines, which are the highest paying customers, were making a comeback to KLIA.
“MAHB’s share price has been lagging the World Airports Index (WAI) by 7% and 45% against its regional peers in 2013 year-to-date. Once there is a firm date for klia2’s completion, people will refocus on MAHB’s solid fundamentals,” it added.
Maybank Research estimated klia2 would be ready for operations in the end of first quarter 2014, nine months from its latest June 28, 2013 target and that project cost could rise to RM4.3bil, up from the original RM3.9bil estimate.
It opined that the additional RM400mil klia2 project cost increase would be debt funded.
“We think a perpetual bond is the most likely debt structure given management’s determination to safeguard its AAA rating for its primary bonds and it cannot afford to raise its gearing ratio by a significant margin. We have imputed a RM500mil perpetual bond, with a profit rate of 5.0% into our earnings forecast.
“Despite this, we upgrade our earnings and target price on the premise of higher traffic growth of 6% per annum in 2014-2020 and assume MAHB will receive an investment tax allowance,” it added.
Maybank Research had upgraded MAHB to a “buy” call from “hold” and revised upward its target price to RM7.20 from RM6.60.
It said the revisions came from the estimated April 1, 2014 start-up date for klia2 with higher traffic growth rate and the investment tax allowance for klia2, which provides 60% additional allowance for approved investment.
“Our financial years 2013 to 2015 earnings forecast are revised by 106.5%, 10.7% and 20.1% respectively,” Maybank Researh said.
The research house estimate lower taxes of RM585mil to RM645mil, ranging on project cost of RM3.9bil-RM4.3bil, for the entire lifecycle of KILA2.
This adds 15 sen per share to our discounted cash flow (DCF)-based target price,” it said.