AIRPORT's 9MCY24 passenger throughput jumped 14% YoY, in line with our expectation. For AIRPORT, the poser is if the proposed privatisation by a consortium at RM11.00/share will be accepted by its minority shareholders, once a formal offer is tabled. We keep our forecasts, TP of RM11.00 and ACCEPT OFFER call.

AIRPORT privatisation status - pre-conditional offer to final offer. We understand that three out of the four conditions have been fulfilled. Once the fourth condition is satisfied, a final offer is expected to be announced. To recap, a consortium comprising Khazanah, EPF, New York-based GIP, and ADIA is buying out AIRPORT shares not already owned, translating to a 67.01% stake for RM12.3b or RM11.00/share cash. The consortium does not intend to maintain the listing status of AIRPORT. The due date to convert into a finalised offer is somewhere in Nov CY24 which is six months from the date of the pre-conditional offer announcement. Consequently, if the firm offer materialises before the due date of six months from the pre-conditional document, the deal is expected to be completed by 1QCY25.

9MCY24 system-wide passenger throughput meets our expectation. AIRPORT's 9MCY24 system-wide passenger throughput (including Istanbul SGIA) came in within our expectation. Total network of airports' passenger traffic continued to gain traction in 9MCY24, recording 101m (+14% YoY) which made up 76% of our full-year forecast. As an indication that traffic recovery has continued to show buoyancy, 9MCY24 passenger movements reached >90% of CY19 level underscoring the underlying demand for air travel. Specifically, international passenger throughput of 53m for 9MCY24 grew 25% partly driven by visa exemptions for Chinese and Indian travellers, the expansion of the airlines network directed towards the international sector and introduction of new routes. The commencement of new airlines, including Air India to Delhi, once weekly frequency of 9 Air to Guiyang and Lucky Air with weekly frequencies to Lijiang City, partly contributed to international passenger movement growth for China and India. The international passenger movements were also supported by AirAsia new operations from KLIA to Labuan Bajo and Lucknow while Malaysia Airlines has commenced daily flights to Da Nang. Domestic passenger throughput continued to record a steady growth, reaching >90% of 9MCY19 level with 48m passengers (+4% YoY).

Its Malaysia operation's total passenger movements for 9MCY24 grew by 15% and reaching >90% of 9MCY19 levels, boosted by international passengers recording 36m (+32%). There has been a notable increase in passengers from Mainland China following the 30-day visa-free entry extension until December 2025, and for the first time with 457 weekly flight frequencies to China, and exceeded 3QFY19 by 24.8%. The India sector also demonstrated a 90% recovery over 2019 levels, indicating growing latent travel demand from India. Similarly, in Türkiye, passenger movements for Istanbul SGIA continued to show resilience in 9MCY24, recording 31m passengers reflecting a 12% increase YoY.

Valuations. We maintain our earnings forecasts. Our TP is the offer price of RM11.00 and our call is ACCEPT OFFER.

Risks to our call include: The consortium fails to secure a 90% stake to make the privatisation mandatory.

Source: Kenanga Research - 18 Oct 2024