KUALA LUMPUR: Malaysia Airports Holdings Bhd (MAHB) is expected to sustain strong passenger traffic growth in 2024-2025, supported by rising demand from key markets such as China, India, and Southeast Asia.

In a note, CIMB Securities Sdn Bhd highlighted that relaxed visa requirements continue to fuel passenger arrivals. China has extended its visa-free policy for Malaysians until the end of 2025, while Malaysia has reciprocated with a similar policy for Chinese tourists until the end of 2026.

"The introduction of new airlines and routes is also expected to enhance traffic growth across MAHB's network," the brokerage said.

The Airports Council International projects a 13 per cent year-on-year growth in air travel demand in Asia-Pacific in 2024, underpinned by strong recoveries in China and India while the Malaysian Aviation Commission has refined its 2024 passenger traffic forecast to a range of 95.4-97.6 million passengers, narrowing from an earlier projection of 93.9-107.1 million.

CIMB Securities said MAHB's 3Q results ending Sept 30, 2024 (3Q FY2024) were in line with expectations.

MAHB reported a net profit of RM210.37 million for the quarter, a significant rise from RM94.76 million a year ago while revenue rose to RM1.53 billion versus RM1.28 billion.

Hence, it has maintained its earnings forecast and "Hold" rating with an unchanged target price (TP) of RM11, consistent with the privatisation offer price.

"This offer presents an opportunity for investors to realise immediate returns while benefiting from the joint offerors' resources and vision for sustainable growth.

"However, Malaysia's long-haul connectivity challenges and the capital investment required for infrastructure upgrades may pose risks to MAHB's organic growth. Hence, we recommend investors to accept the offer," it said.

Meanwhile, MIDF Amanah Investment Bank Bhd continues to recommend investors accept the buyout offer at RM11, which reflects an 18 per cent premium to the fair value.

At 11.15 am, its share price was up four sen to RM10.60 with 73,200 units traded.