Macquarie Equities Research (MQ Research) released a report on Malaysia Airports Holdings (MAHB) on Tuesday (24 Sep), showing the momentum in flight passenger traffic numbers sustained ahead of the expected seasonal downturn from September to November. The next regulatory update to expect is the Aeronautical Charges Framework, which will cement MAHB’s transition to the RAB framework by Jan 2020.

Impact

• On the heels of Malaysian Electricity Supply Industry (MESI) 2.0 & National Fiberisation and Connectivity Plan (NFCP), the next regulatory update to expect is the Aeronautical Charges Framework. It will cement MAHB’s transition to a Regulated Asset Base (RAB) framework by Jan 2020 and substantially de-risk expectations.

Earnings and Target Price Revision

• No Change.

Price Catalyst

• 12-month price target: RM10.50 based on a Sum of Parts methodology.
• Catalyst: RAB framework unveiled by end-Sept.

Action and Recommendation

• Maintain Outperform (OP) on RAB-led catalyst.

12-month Target Price Methodology

• MAHB MK: RM10.50 based on a Sum of Parts methodology

Source: Macquarie Research - 26 Sept 2019