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KUALA LUMPUR, March 30 — Kenanga Research has downgraded its net profit target for Malaysia Airports Holdings Bhd’s (MAHB) financial year estimate 2020 and 2021 by 43 per cent and 19 per cent in light of Covid-19.
The research firm, in a note, said MAHB would be hit by Covid-19 in terms of passenger traffic growth and potential tariff rebates or discounts on its retail rentals.
“We expect a lower-than-expected passenger movement due to carriers grinding to a halt caused by travel restrictions both locally as well as globally.
“All in, we cut our passenger growth assumption in FY20 from 4.0 per cent to -12 per cent,” it said.
Kenanga Research has also cut its target price on MAHB to RM5.70 from RM7.20 set earlier, believing the recent sell-down presents an opportunity to buy the airport operator’s beta stock.
In another note, the research house said the restrictions and collapse in air travel due to Covid-19 would have an impact on AirAsia and other airline operators.
Over the medium term, it expects AirAsia to face extremely tough operating environment due to widespread travel disruptions, lower ticket prices and load factor, which are likely to drag down yields and hence a very challenging earnings outlook ahead.
“With a net cash of RM2.2 billion as at Dec 31, 2019, we expect AirAsia to be able to weather through this Covid-19 crisis and hopefully without deteriorating its balance sheet.
“We cut our FY20 estimate assumptions and hence forecast a wider net loss of RM527 million instead of RM258 million,” it said,
Kenanga Research has lowered its target price on AirAsia from RM1.00 to RM0.60 whilst maintaining the ‘Underperform’ rating. — Bernama
