Malaysia Airports; Hold
Price Target: RM6.05; MAHB MK

MAHB announced that its Board is of the view that the contractors of klia2 may not be able to meet the 28 June 2013 deadline. There was no indication of a more realistic target completion date.

Our FY13f earnings would be higher on a later opening given our more conservative assumptions on depreciation and amortization for klia2. Assuming klia2’s opening is delayed to 1 Jan 2014, our FY13f earnings could be revised up 15%.

We maintain our HOLD recommendation and RM6.05 SOP-based TP on MAHB. We expect near term share price upside to be capped by valuations. In the longer term, the Group’s prospects will be underpinned by greater passenger growth and acceleration in non-aeronautical earnings with the opening of klia2, and value-enhancing development of land surrounding the airport.

Source: HwangDBS Research - 8 May 2013