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NewsMaybank IB raises MAS earnings forecast (3786, MAS)
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Maybank IB raises MAS earnings forecast (3786, MAS)
by JF Wed 15 Aug 2012, 23:33
Maybank IB Research has raised the financial year 2013-14 earnings forecast of Malaysia Airlines (MAS) by 5.5 per
cent and 1.4 per cent respectively.
It took into account the management's latest capacity growth guidance and better fuel consumption rates due to a younger aircraft fleet.
"The earnings forecast is premised on a fuel price assumption of US$125 per barrel, which will be adjusted as required," it said in a research note today.
The research house is also positive on prospects of the national airline breaking even in the second half of the financial year 2012.
It said there were many improvements in its second quarter performance, such as higher overall load factor of passengers plus cargo, higher yields at 24.2 sen, up 6.2 per cent year-on-year, with overall revenue per available capacity
rising 8.8 per cent to 1.88 sen.
"These are strong indications that its business turnaround plan is having a positive impact," it added.
Maybank IB said the third quarter is typically a peak period of air transit and coupled with lower fuel prices, MAS may post a modest profit then.
Hong Leong Investment Bank in a separate note is positive on the MAS business turnaround plan, with the new management team and lower unit operating costs, alongside delivery of new aircraft.
The airline is also expected to leverage on the Oneworld Alliance network to improve services and connectivity.
However, it said competitive pressure from low cost and full cost
carriers, as well as higher jet fuel prices are amongst challenges to the airline.
Meanwhile, HwangDBS Vickers in another note said MAS needs to manage costs more efficiently, to compete with other airlines and increase the load factor.
"There are also many internal issues that MAS has to address and execution risk (of the business transformation plan) remains high," it added.
Maybank IB has raised the recommendation for MAS to "buy" from "hold" and increased its target price to RM1.20 from 97 sen, while Hong Leong maintained a "sell" call with an unchanged target price of 92 sen.
HwangDBS Vickers has maintained a "fully valued" rating with the target price pegged at 90 sen. -- Bernama
Read more: Maybank IB raises MAS earnings forecast [You must be registered and logged in to see this link.]
cent and 1.4 per cent respectively.
It took into account the management's latest capacity growth guidance and better fuel consumption rates due to a younger aircraft fleet.
"The earnings forecast is premised on a fuel price assumption of US$125 per barrel, which will be adjusted as required," it said in a research note today.
The research house is also positive on prospects of the national airline breaking even in the second half of the financial year 2012.
It said there were many improvements in its second quarter performance, such as higher overall load factor of passengers plus cargo, higher yields at 24.2 sen, up 6.2 per cent year-on-year, with overall revenue per available capacity
rising 8.8 per cent to 1.88 sen.
"These are strong indications that its business turnaround plan is having a positive impact," it added.
Maybank IB said the third quarter is typically a peak period of air transit and coupled with lower fuel prices, MAS may post a modest profit then.
Hong Leong Investment Bank in a separate note is positive on the MAS business turnaround plan, with the new management team and lower unit operating costs, alongside delivery of new aircraft.
The airline is also expected to leverage on the Oneworld Alliance network to improve services and connectivity.
However, it said competitive pressure from low cost and full cost
carriers, as well as higher jet fuel prices are amongst challenges to the airline.
Meanwhile, HwangDBS Vickers in another note said MAS needs to manage costs more efficiently, to compete with other airlines and increase the load factor.
"There are also many internal issues that MAS has to address and execution risk (of the business transformation plan) remains high," it added.
Maybank IB has raised the recommendation for MAS to "buy" from "hold" and increased its target price to RM1.20 from 97 sen, while Hong Leong maintained a "sell" call with an unchanged target price of 92 sen.
HwangDBS Vickers has maintained a "fully valued" rating with the target price pegged at 90 sen. -- Bernama
Read more: Maybank IB raises MAS earnings forecast [You must be registered and logged in to see this link.]
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