Malaysia Airports Holdings Bhd’s (MAHB) outlook appears promising based on the notable recovery in international passenger traffic in China and Turkey, according to RHB Investment Bank Research (RHB IB).

In a note today, the investment bank has affirmed a “buy” call on MAHB at RM7.70, lifting its target price to RM8.70 from the previous RM8.31.
RHB IB anticipates that MAHB’s wholly-owned Turkish asset, the Istanbul Sabiha Gokcen International Airport, will maintain its positive momentum in international traffic through the second half of 2023.

This expectation is based on the robust year-end seasonality and the introduction of new airlines and routes.

In addition, it has adjusted MAHB’s FY2023 traffic assumptions to better reflect the potential growth prospects from the Turkey operations.

“We also revised Malaysia’s FY2023 international passenger movements to 92.5 million from 99.9 million to reflect a slower recovery pace,” it said.

MAHB registered more than 11 million total passenger movements in July.

Both MAHB’s Malaysia and Turkey operations recorded a new high in passenger movements last month, at 7.4 million and 3.7 million, respectively.

Although the research house has sliced its FY2023 earnings forecast for MAHB by 3%, it improved the group’s earnings forecasts by 9% for FY2024 and by 12% for FY2025.

This is to account for the net effect of delayed recovery from China and stronger international tourist movements in Turkey moving forward.

For the second quarter ended June 30, 2023 (Q2 FY2023), the group reported a net profit of RM102.5 million, 76% higher compared to a net loss of RM58.1 million a year ago.

Revenue rose 74% to RM1.2 billion from RM689.8 million compared to the same quarter last year.

As at 12.27pm, MAHB’s share price was down by eight sen (1.04%) at RM7.62, giving it a market capitalisation of RM12.71 billion.