Thursday, October 27, 2011

OSK Research reaffirms Buy on MAHB

KUALA LUMPUR: OSK Research is reaffirming its Buy call on Malaysia Airports Holdings Bhd (MAHB) with a discounted cashflow (DCF)derived target price of RM7.36.

It said on Thursday, Oct 27 MAHB reported commendable earnings, with its cumulative core net profit coming in line with its estimates but ahead of consensus.

OSK Research said topline growth was fuelled by higher passenger spending while its bottom-line got a boost from a higher utilisation rate and economies of scale.

'MAHB is likely to see a reduction in User Fees paid to the Government given the freeze on the airport operator's proposed tariff hike, as the Government will pay compensation for the potential revenue loss,' it said.

The research house said in the pipeline are two more JV initiatives and a 50-acre development of a factory outlet.

'With its 9MFY11 earnings in line, we make no changes to our earnings at this juncture. We re-affirm our BUY call, with a DCF-derived target price of RM7.36, based on 9% WACC,' it said.

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