KUALA LUMPUR, Feb 16 ― RHB Research has upgraded Malaysia Airports Holdings Bhd (MAHB) to “buy” from “neutral” call with higher target price (TP) of RM6.56 from previously RM4.90.
In a note today, the research firm said the increase in TP was due to the earnings estimates upgrade, while it rolled over its discounted cash flow valuation base year to financial year 2022 (FY22).
“We believe that MAHB should benefit from the expected significant decline in Covid-19 cases both globally and domestically, as the vaccine effect becomes prevalent in the next 12 months,” it said.
It said Malaysia Airports booked soft passenger volume in January, hence, RHB Research expects MAHB to record a net loss in the fourth quarter of 2020 (4Q20).
“We expect MAHB to book a net loss of RM439 million for 4Q20. Having said that, we believe that investors should look beyond the near-term earnings weakness, due to the expected turnaround in 4Q21 and FY22.
“We have assumed higher passenger volume for FY22 for both the company’s Malaysia and Turkey operations, while no changes to FY20-21F net profit,” it added.
As at 11.20am, MAHB rose five sen to RM5.59 with 482,600 shares transacted. ― Bernama