RHB Research has maintained its 'buy' call on Malaysia Airports Holdings Bhd (MAHB) despite seeing higher staff recruitment and maintenance costs in the first quarter of 2014 (1Q14), ahead of klia2's May 2 opening.
"We continue to like MAHB's klia2 theme, which could propel its cash earnings moving forward," the research house said in a note today.
"Premised on the 18.4% year-on-year traffic growth witnessed in 1Q14, we estimate that the group could post a quarterly core net profit of RM100 million, as we foresee upfront costs like staff and maintenance costs will likely be incurred ahead of klia2's opening," it said.
The rise in costs will be mitigated by the increase in passenger service charge, which will be compensated by the government, it added.
"With klia2 commencing soon, it is only a matter of time before MAHB is awarded the concession extension of an additional 25 years, which will cut the airport's annual depreciation substantially," RHB Research said.
It forecasts a higher total turnover of RM3.01 billion for MAHB for the December 2014 financial year-end compared to RM2.463 billion for the December 2013 financial year-end.
MAHB is also forecast to obtain a higher net profit of RM319 million for the 2014 financial year-end compared to RM306 million recorded for the 2013 financial year-end.
RHB Research maintains its 'buy' call with an unchanged fair value of RM9.80. – Bernama, April 22, 2014.
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