KUALA LUMPUR, Feb 10  — CGS-CIMB reiterated its “add” call on Malaysia Airports Holdings Bhd’s shares (MAHB) as the airport operator may profit from new Malaysian aviation market entrants stimulating traffic through cheap promotional prices and price competition.

The brokerage firm forecast MAHB’s domestic passenger traffic to recover to 70 per cent of the pre-pandemic 2019’s level this year, and international passenger levels to rise to 25 per cent of 2019’s level.

In a research note today, it said the eventual return of international travellers will have a highly beneficial impact on MAHB as international passengers pay five times to seven times more in benchmark passenger service charges than domestic passengers, and can also shop at duty-free outlets.

“As such, the earnings leverage will be enormous,” it added.

However, CGS-CIMB said a downside risk for MAHB is potential new COVID-19 variants which could lead to border closures.

It also noted that several large and populous regional neighbours have continued to restrict arrivals, such as Indonesia, Vietnam, Japan, Hong Kong, China and India.

“A fuller and more robust recovery in MAHB’s international passenger traffic will depend on whether and when these countries liberalise their inbound restrictions,” it added.

MAHB’s share price rallied by nine per cent over the past two days on news that the National Recovery Council (NRC) had recommended for the government to permit quarantine-free travel into Malaysia from Mar 1, 2022.

At 10.50 am, its share price fell by two sen to RM6.24 with 76,900  shares transacted

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