Malaysia Airports; HOLD; RM8.41
Price target: RM7.90 (Prev RM8.00); MAHB:MK

MAHB completed the placement of 124m new shares (10% of issued and paid-up capital) yesterday. The shares were issued at RM7.90/share, representing 4.3% discount to the 5-day volume weighted average price. Recall, the placement raised RM980m to fund the acquisition of a 40% stake in Sabiha Gokcen Aiport (SGA) in Istanbul. This raises the Group’s stake in SGA to 60%.

Factoring in the additional stake and new shares issued, our SOP-based TP is adjusted to RM7.90 (from RM8.00/share). In the longer term, MAHB’s prospects will be underpinned by strong passenger growth and acceleration in non-aeronautical earnings with the opening of KLIA2, and value-enhancing development of land surrounding the airport. However, we expect near term share price upside to be capped by valuations. We maintain our Hold recommendation for MAHB. 

Source: HwangDBS Research - 5 Mar 2014