Kenanga: MAHB fundamentals still strong despite klia2 delay

by **Cals** Wed 19 Jun 2013, 15:43

Kenanga: MAHB fundamentals still strong despite klia2 delay
Business & Markets 2013
Written by Kamarul Anwar of theedgemalaysia.com
Wednesday, 19 June 2013 13:57

KUALA LUMPUR (June 19): Malaysia Airports Holdings Bhd’s (MAHB) fundamentals remain strong despite klia2’s delay, said Kenanga Investment Bank in a note today.

The research house explained this was due to its traffic numbers continuing to grow healthily.

“To recap, MAHB registered an 8.7% growth on 1Q13 and has guided a 7% traffic growth in 2013,” said Kenanga.

However, the delay of klia2’s opening prompted the research house to cut its target price on the airport operator by 59 sen or 8.21% to RM6.60.

At noon break, MAHB shares dipped one sen to settle at RM6.09. A total of 503,700 shares changed hands.

MAHB yesterday announced its latest targeted opening date for klia2 to be May 2, 2014.

The new date came a day after it imposed liquidated ascertained damagaes on its main contractor, UEMC-Bina Puri JV.

“We understand the progress for klia2 is already in the final stages and is currently at 93%. We believe that given another 10 months to complete the project..., the opening of KLIA2, which is slated on May 2, 2014 is highly achievable this time around,” Kenanga said.

"Despite the delays on klia2, MAHB remains our top pick for the aviation industry on the back of diversified earnings and better airport traffic from increasing competition between low-cost carriers,” the research house also commented.

In 1QFY13, the airport operator registered a 22.71% year-on-year increase in net profit to RM126.06 million.

Its revenue also swelled by more than half to RM1.03 billion from the previous corresponding quarter's RM657.71 million.

In a Bursa Malaysia filing, MAHB said the increase in net profit was due to CONSTRUCTION [] profit, positive growth in revenue and lower share of associate loss.