KUALA LUMPUR: Hong Leong Investment Bank (HLIB Research) anticipates increased earnings momentum in fiscal year 2024 for Malaysia Airports Holdings Bhd (MAHB), propelled by sustained robust demand for air travel, particularly following the easing of visa requirements for travellers from the China and India sectors.
The research firm emphasised that the relaxation of visa regulations, which took effect on Dec 1 last year, has positively influenced air travel.
Furthermore, HLIB Research foresees additional enhancements in air traffic as airlines expand their fleets and capacities in alignment with the ongoing recovery in air travel demand.
"Airlines are expanding their international flight capacities, sometimes shifting resources from domestic routes.
"MAHB stands to gain from the growing contributions of commercial and retail segments, as all airports, except Langkawi, have begun charging full rental fees due to increased passenger traffic and spending.
"Additionally, MAHB's focus on airport developments, such as KLIA Aeropolis and Subang Aeropolis, will be facilitated by the forthcoming finalisation of Operating Agreements (OA) and Regulated Asset Bases (RAB)," it added.
HLIB Research has adjusted its earnings forecasts for MAHB downwards for fiscal years 2025 and 2026 (FY25-26), with reductions of 13.9 per cent and 12.4 per cent respectively.
Despite this, the investment bank has raised the target price for MAHB to RM9.80 from RM8.90 and has maintained its 'Buy' recommendation.
"Additionally, the sale of GHIAL for US$100 million by the first quarter of fiscal year 2024 (1QFY24) will further fortify MAHB's balance sheet," it added.