KUALA LUMPUR, May 13 — MIDF Research today has reiterated a “buy” call on Malaysia Airports Holdings Bhd (MAHB) with an unchanged target price of RM8.90 per share.

In a note today, it said the favourable tourism industry is set to offset the impact from the soon-to-be-imposed departure levy in June 2019.

“We opine the extension of the visa relaxation for Chinese passengers until the end of this year should sustain the passenger growth.

“Moreover, we expect MAHB’s efforts in not only attracting more new airlines but also offering increased connectivity to moderate the effects of the departure levy for outgoing international passengers,” it added.

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MIDF Research also sees MAHB benefitting significantly from ÁirAsia ad AirAsia X’s move to strengthen their presence in core markets while establishing new hubs in destinations such as Lombok.

“Therefore, we strongly believe that MAHB passenger numbers can surpass the 100 million mark in 2019 while maintaining its relatively conservative target growth rate of 3.5 per cent at approximately 102.5 million passengers,” it added.

The research house said the 51:49 ratio of international to domestic passengers also bodes well for MAHB due to the higher passenger service charge for international passengers compared to domestic passengers.

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“MAHB targets to bring in 10 new airlines to Malaysia, especially to its five main airports.

“This will maintain the stronger mix of international passengers, which bodes well for MAHB in terms of the higher passenger service charges collected; RM35 for Asean and RM73 for beyond Asean,” MIDF Research said.

In April 2019, the passengers’ traffic for MAHB airports (excluding Istanbul Sabiha Gocken Airport) rose 6.6 per cent year-on-year to 8.8 million passengers, the highest growth recorded in 10 months.

Of the total, the international passenger traffic increased by 2.5 per cent year-on-year to 4.4 million while the traffic for domestic passengers grew 11.2 per cent to 4.4 million passengers, the largest growth recorded in nearly two years.

Overall, the passenger traffic for the first four months of 2019 posted a 4.7 per cent year-on-year growth to reach 34.2 million, making up 33.7 per cent of MIDF Research’s 2019 passenger traffic growth estimates.

At 12.30 pm today, MAHB shares dropped 13 sen to RM7.15. — Bernama