Stock Name: AIRPORT
Company Name: MALAYSIA AIRPORT HOLDINGS BHD
Research House: HLG

KUALA LUMPUR: HLG Research is maintaining its Overweight recommendation on the aviation sector following the Malaysian government's initiatives in developing KLIA as a strategic aviation hub in Southeast Asia.

It said on Monday, Oct 11 that the initiatives to boost the Tourism Industry (under 10th Malaysia Plan and ETP) would augur increasing air travels into Malaysia.

Additional aircrafts by MAS and Airasia supports the industry growth. Further, new aircrafts also allow lower unit cost due to higher fuel efficiency, lower maintenance and larger capacity.

'MAHB (BUY, TP RM6.58) ' Higher passenger traffic from government initiatives as well as the regional strong economic growth, will increase its aeronautical revenue and augment its non-aeronautical revenue due to higher spending per passenger, while not having direct impact from the fluctuations of jet fuel price.

'Airasia (BUY, TP RM2.54) ' Continued regional liberalization of air travel and strong regional economic growth will increase demand for air travel with strong competition among regional airlines, Airasia will stand out with the lowest unit cost and the largest network,' HLG Research said.