Malaysia Airlines; Fully Valued; RM0.25
Price target: RM0.27; MAS:MK

Flight MH370 from Kuala Lumpur bound for Beijing on 8 March was reported missing after approximately two hours from take-off. The search for the Boeing 777-200 aircraft and its 239 passengers are still ongoing.

The extent of the implication on earnings and target price will be dependent on the outcome of the investigations. The stock is down 19% since the announcement of a RM342m net loss for 4Q13 on 18 February. The Group has been struggling with the intense competition in the industry. Book value now stands at RM0.24/share, bolstered by a recent rights issue. Our Fully Valued recommendation and RM0.27/share (based on 1.1x book value) target price are under review. However, until the cause is determined the event may weigh down on near term share price.

Source: HwangDBS Research - 10 Mar 2014