Hot Stock MAHB top gainer, jumps 6% despite tepid traffic growth

by **Cals** Thu 15 Oct 2015, 17:43

Hot Stock

[size=28]MAHB top gainer, jumps 6% despite tepid traffic growth

By Kamarul Anwar / theedgemarkets.com | October 15, 2015 : 12:57 PM MYT

KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) became one of this morning’s top gainers with its share price jumping as much as 6.27% despite analysts’ lukewarm reaction towards its traffic growth and lack of catalysts.

At noon break, MAHB (Fundamental: 0.8; Valuation: 1.4) added 24 sen or 4.56% to RM5.50. The counter, which was traded higher so far, had a trading range of RM5.31 and RM5.59 and saw 1.36 million shares changing hands.

MAHB share price may still have some upside, according to analysts. Bloomberg recorded the average target price by analysts tracking the airport operator at RM6.23, or 13.27% higher than the last traded price. This double-digit potential upside came despite the stock’s jump to the highest level since early August, as the stock was heavily sold down thereafter.

However, the research community currently is not as sanguine towards MAHB. Of the 20 analysts tracked by Bloomberg, only eight are advocating MAHB as a “buy”, and five gave the stock a “sell” rating. Most analysts recommend a “hold”.

Last Monday (Oct 12), MAHB reported a 1.9% increase in passenger growth for its Malaysian airports for the year through September. In the month of September alone, the rise came to 1.1% only.

While the airport operator said it was seeing a recovery in the amount of passengers from China, the international traffic grew a mere 0.2% year to date.

TA Securities Holdings Bhd today was one of the five research houses with a “sell” call on MAHB. In a note today, TA analyst Tan Kam Meng said the research outfit’s initial projection of a 3.8% growth this year was “optimistic”.

The analyst’s new forecast for traffic growth came to 3.5% for domestic passengers and 1% for international, with the latter being a dramatic cut from 6% previously.

“We believe the stock has found its bottom at the recent low of RM4.22. However, for the price to move higher from the current level, there must be strong factors to drive future earnings, which we do not see in the near term,” said Tan.

TA cuts its target price for MAHB to RM5.40, down from RM5.68 previously.
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