Malaysia Airports; Hold; RM5.62
Price Target: RM6.70; MAHB MK

Malaysia Airports (MAHB) is set to raise RM616m after it announced that it has fixed its private placement shares at the price of RM5.60 per share, representing a 2.4% discount to its past 5-day VWAMP of RM5.74. This is slightly higher than our previous assumption of RM550m proceeds from the private placement, which will be used to partly fund the higher development costs of the new klia2 (estimated to range between RM3.6bn to RM3.9bn). No further financing options will be needed after this exercise as the full costs of the new klia2 would be fully covered by its current RM3.1bn sukuk funding and the private placement proceeds.

After the private placement exercise, MAHB's share base will be enlarged to 1.21bn shares from 1.1bn shares previously. This could dilute our earnings for FY12F and FY13F by 9.1%. We maintain our Hold call and  SOP-based RM6.70 TP for the time being. Longer term, we are positive on the prospects of MAHB due to future land development projects around the KLIA and the opening of the new klia2 in April 2013.