KUALA LUMPUR, Feb 11 (Bernama) -- Bursa Malaysia ended higher today as buying on selected blue chips continued, said a brokerage. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 8.85 points or 0.51 per cent to 1,756.39 from Tuesday’s close of 1,747.54. The barometer index opened 3.69 points higher at 1,751.23 before moving as low as 1,745.51 in early trade to as high as 1,757.15 during the mid-afternoon session. Market breadth was positive with gainers leading losers 575 to 474, while 549 counters were unchanged, 1,087 untraded and 11 suspended. Turnover expanded to 2.55 billion units valued at RM3.06 billion from yesterday’s 2.19 billion units valued at RM2.35 billion.
Maintain outperform with unchanged target price (TP) of RM7.31
AIRPORT?s Malaysia and Turkey?s passenger traffic growth of 5.8% and 5.3% YoY-YTD came in within our 6.0% and 7.0% targets, respectively. Total November passenger numbers (including ISG) registered growth of 7.3% YoY mainly driven by its Malaysian operations. We maintain our passenger growth estimates and make no changes to earnings estimates. Reiterate OUTPERFORM with unchanged TP of RM7.31.
YTD passenger traffic growth. Total passenger growth for Malaysian airports and ISG (Turkey) which were up 5.8% and 5.3% YoY-YTD came in within targets of 6.0% and 7.0%, respectively. AIRPORT?s total November passenger numbers (including ISG) registered growth of 7.3% YoY, mainly driven by its stronger Malaysian operations.
Malaysian passenger traffic review. In November, AIRPORT?s passengers in Malaysia increased 8.8% YoY. International and domestic passengers were up 12.1% and 5.9%, respectively. The overall increase was mainly due to: (i) improved average load factor to 75% (+3.0ppt), (ii) higher demand for international travel in which 80% of international airports recorded double-digit YoY growth (+8% to +28%), and (iii) new foreign airlines coupled with existing domestic carriers operating at increased frequencies.
KLIA Main continues its strong growth. In November, KLIA Main registered a growth of 32.8% YoY with international and domestic passengers registering positive growth rates of 28.7% and 45.0%, respectively. We believe the robust growth is supported by Malaysia Airlines Bhd (MAB)?s increased frequencies coupled with Malindo and Lion Air?s shift from klia2 to KLIA Main since Mar 2016. YoY-YTD, KLIA Main registered record growth of 10.9% (against previous months? growth of -12.9% to +9.0%). Meanwhile, KLIA 2 showed negative growth of 3.2% YoY (International: -1.6%; Domestic: -6.3%) due to passenger traffic moderating from Malindo and Lion Air?s shift in operations.
Turkey operations recorded second consecutive growth since negative events. ISG Airport?s passenger growth for November was up 2.5% YoY registering its second consecutive growth post the bombing, military coup and declaration of state of emergency in Turkey. The growth was mainly buoyed by its domestic passenger, which registered a healthy growth of 6.1% while international passengers were still in negative territory (-5.1%).
Maintain earnings. Post review of November traffic figures, we make no changes to our FY16-17 earnings forecasts as passenger growths in Malaysia and Turkey are in line with our targets.
Maintain OUTPERFORM with an unchanged TP of RM7.31 based on a 5-year +0.5SD FY17E PBV of 1.58x. We have applied +0.5SD to our valuations in view of the improved PSC structure from FY17 which will see the gradual equalization of PSC charges for KLIA Main and KLIA 2 providing AIRPORT better earnings outlook. We believe further upside to TP lies with: (i) extension of operating agreement, (ii) stronger traffic from the international front, and (iii) faster-than- expected recovery from Turkey operations.
Source: Kenanga Research - 13 December 2016
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