Wednesday, November 23, 2011

RHB Research maintains Underperform on MAS

KUALA LUMPUR (Nov 23): RHB Research Institute is maintaining its Underperform recommendation on MALAYSIAN AIRLINE SYSTEM BHD [] (MAS) with a fair value of RM1.04.

It said on Wednesday that it came out of MAS' analysts' tele-conference feeling disappointed in the absence of indications of any bold and dramatic moves that will turn things around.

'MAS only spoke about some logical things an airline would do in its normal course of business such as cutting unprofitable routes, redeployment of capacity, improving fuel burn and negotiating with aircraft manufacturers for better terms.

'We had expected more bold and dramatic moves from the new management such as a steep reduction in headcount,'' a total revamp of its procurement system, recapitalisation of its balance sheet and roping in a leading international airline as equity partner to help strengthening processes, revitalising work culture and broadening market reach and presence,' RHB Research said.

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