Nomura Research raises target price for MAHB to RM11.18

Nomura Research raises target price for MAHB to RM11.18
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KUALA LUMPUR (Dec 1): Nomura Research has raised its target price for Malaysia Airports Holdings Bhd (MAHB) to RM11.18 (from RM11.11) and said following the Malaysian Aviation Commission's (MAVCOM) announcement of a passenger service charge (PSC) equalisation at KLIA2 airport from Jan 1, 2018, whereby non-ASEAN international PSCs have been raised from RM50 to RM73.

In a note today, the research house has raise its FY18F/19F core earnings estimates for MAHB by 11.1%/7.3%.

Nomura estimates the increase in top line on PSC revenue (net of MARCS, or marginal cost support) to be circa RM80 million and RM65 million for FY18F and FY19F respectively.

“Accompanying the PSC equalisation announcement, MAVCOM is set to introduce an Airports Quality of Service (QoS) framework to be implemented in 3Q18.

“But we believe MAVCOM is singling out the responsibility only to the airport operator; we think the burden of responsibility should also be borne by airlines, customs and immigration.

“Outlook: The increase will not dent demand for air travel,” said Nomura.