KUALA LUMPUR (Sept 11): MIDF Amanah Investment Bank Bhd Research has maintained its "Buy' rating on Malaysian Airports Holdings Bhd (MAHB) at RM8.57 with an unchanged target price of RM9.43, and said the airport operator's domestic and international passenger traffic stands strong.

In a note today, MIDF Research said the number of passengers that MAHB handles could go beyond the 100 million mark in 2019, while maintaining a growth rate of 3.5%, which is equivalent to 102.5 million passengers.

The research house said the passenger traffic growth for MAHB airports for August 2019 (excluding Istanbul Sabiha Gokcen International Airport [ISGA]) reported an increase of 9.2% year-on-year (y-o-y) to 9.2 million passengers.

It said for the first eight months of 2019, the airports in Malaysia showed a 5.6% y-o-y increase to reach 69.6 million, which is 68% of MIDF Research's passenger traffic growth estimate of 102.5 million passengers.

"As for ISGA, the international passenger traffic increased 17.5% y-o-y to reach 1.4 million for the same month, which managed to outweigh the 5.4% y-o-y decline to 2 million in domestic passenger traffic.

"The overall passenger growth for ISGA for the first eight months of 2019 is 2.9% y-o-y. The overall cumulative total of passenger traffic for MAHB (including ISGA) increased by 4.9% y-o-y to 93.1 million for the first eight months of 2019," it said.

MIDF Research said domestic traffic for airports in Malaysia in August 2019 has surpassed the December 2018 peak traffic with its continued upwards trend, increasing 14.8% y-o-y to 4.7 million passengers.

It said the international passenger traffic remains firm as of August 2019.

"MAHB has reported an increase of 4% y-o-y to reach 4.6 million passengers; the highest number recorded as of December 2018 and is following the upward trend of the domestic traffic for the airports in Malaysia.

"Even with the news of MAHB being fined RM1.2 million by the Malaysian Aviation Commission (Mavcom), it should not affect its overall projected earnings," said the research house.

MIDF Research said the fine was due to MAHB's failure to meet several requirements of the Aviation Quality of Service (QoS).

It explained that the fine was not due to the system disruption that happened in late August 2019 but was related to toilet cleanliness for staff and passengers in respect of 1QCY19.

"We opine that the current momentum of passengers' traffic will continue to provide a strong base for incremental revenue generation moving forward," it said.