MALAYSIA AIRPORTS PASSENGER TRAFFIC Domestic travel starting to gather pace

Transcription

1 14 September 2016 Monthly review of statistics MALAYSIA AIRPORTS PASSENGER TRAFFIC Domestic travel starting to gather pace HIGHLIGHTS Passenger traffic growth in August was impressive at +5%yoy for Malaysian Airports Domestic sector now in positive territory after a sluggish 1HFY16 KLIA MTB records better passenger numbers due to the presence of Malindo and Lion Air Istanbul SGIA s passenger traffic recorded a wider decline of -5%yoy in August We maintain our NEUTRAL call on MAHB with unchanged TP of RM6.00 PASSENGER TRAFFIC FOR AIRPORTS IN MALAYSIA: AUGUST 2016 Impressive growth recorded in August for Malaysian Airports. Passenger traffic growth in Malaysian airports increased by an impressive +5%yoy in the month of August 2016 at 7.5m passengers which is the second highest monthly passenger figure in 2016 after July s 7.8m passengers (Hari Raya holidays). It is notable because traffic tends to taper after the Hari Raya holiday and the fact that there was only 1 public holiday in August. This brings up the cumulative year-to-date growth to +3.3%yoy which is outpacing our forecast of +3% for the full year. International sector continues to perform while domestic is picking up. Both the domestic and international sectors performed well, each recording growth of +5%yoy. The domestic sector caught our attention as it overturned a -1.2%yoy decline in 1HFY16 and is now +0.6%yoy on a year-to-date basis indicating that sluggishness in demand for domestic travel is dissipating. Meanwhile, the international sector continued to perform well as it has done consistently throughout 2016 with higher tourist arrivals from North Asia, South Asia, Asean, Middle East and Oceania regions. Arrivals from China remains strong at above 500k in 2QFY16 representing a growth of +56.3%yoy. More positive highlights from the August report, including: +2.8ppt yoy growth in average load factor to 74.8% which is higher than 2015 s average of about 70%; An increase in overall aircraft movements by +0.4%yoy which may seem marginal but represents the first positive growth in 2016; KLIA Main Terminal Building (MTB) recorded traffic growth of +25% due to the presence of Malindo and Lion Air since March The higher growth in KLIA MTB is positive for MAHB as Passenger Service Charges (PSC) are double that of klia2; and 8 new foreign carriers were introduced in 2016, including VietJet and Jeju Air. KINDLY REFER TO THE LAST PAGE OF THIS PUBLICATION FOR IMPORTANT DISCLOSURES

2 2 MALAYSIA AIRPORTS: MONTHLY PASSENGER TRAFFIC (MILLION) m MALAYSIA AIRPORTS: MONTHLY PASSENGER TRAFFIC (GROWTH %YOY) 28.0% 23.0% 18.0% 13.0% 8.0% 3.0% +5% -2.0% -7.0% 1

3 3 MALAYSIA TOURIST ARRIVALS FROM CHINA (GROWTH %YOY) % 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 Tourist Arrivals '000 (China) Growth yoy (%) 80.0% 70.0% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% Source: Tourism Malaysia, China Customs, MIDFR MALAYSIA AIRPORTS: INTERNATIONAL PASSENGER TRAFFIC (MILLION & GROWTH %YOY) 4.5 m +5.2% % 20% 15% 10% 5% 0% -5% -10%

4 MALAYSIA AIRPORTS: DOMESTIC PASSENGER TRAFFIC (MILLION & GROWTH %YOY) 5.0 m % 35% 30% 25% 20% 15% 10% 5% 0% -5% -10% -15% PASSENGER TRAFFIC FOR ISTANBUL SGIA: August 2016 Passenger traffic fell by a larger -5%yoy in August after a -3.8%yoy drop the month prior following the attempted coup, declaration of state of emergency and subsequent travel advisories by several large countries. The international sector continued to languish, declining -8.7%yoy following security concerns. In addition, the normally resilient domestic sector was also hit, posting a decline of -2.9%yoy. Cumulative 8 months growth for SGIA tapered to +7%yoy from its impressive run in the first half which saw growth of +13%yoy. Looking forward, progress in talks to allow Visa free travel between Turkey and Europe could bode well for SGIA. ISTANBUL SGIA: TOTAL YEARLY PASSENGER TRAFFIC (MILLION & GROWTH %YOY) m -5% 50% 40% % % 1 10% 0.5 0% 0-10% 1 4

5 5 OUTLOOK AND FORECASTS We maintain our NEUTRAL call on MAHB with unchanged TP of RM6.00. Impressive growth numbers from Malaysian airports are unfortunately negated by declines in Turkey dragging down overall growth for MAHB passenger traffic to +2%yoy. Our TP is derived using the DCF method assuming WACC of 7.7% and Beta of 1.1. Potential rerating catalysts for MAHB are: 1) Granting of visa free travel between Turkey and Europe; 2) Substantial third party investments in the KL Aeropolis project; and 3) hike in PSC rates at klia2. In view of the better-than-expected performance in passenger traffic at Malaysian airports, we are reviewing our recommendation on MAHB. INVESTMENT STATISTICS FYE Dec FY14 FY15 FY16F FY17F FY18F Revenue* (RM m) 2, , , , ,558.3 EBIT (RM m) 1, Pretax Profit (RM m) Net Profit(RM' m) Core Earnings* (RM m) 67.5 (73.6) EPS (sen) 30.8 (4.4) EPS growth (%) (7.4) (114.4) PER (x) 20.9 N/A Net Dividend (sen) Net Dividend Yield (%) * Excluding the effect of IC12 Source: MIDFR, MAHB DAILY PRICE CHART Tay Yow Ken, CFA tay.yk@midf.com.my

6 6 MIDF RESEARCH is part of MIDF Amanah Investment Bank Berhad ( X). (Bank Pelaburan) (A Participating Organisation of Bursa Malaysia Securities Berhad) DISCLOSURES AND DISCLAIMER This report has been prepared by MIDF AMANAH INVESTMENT BANK BERHAD (23878-X). It is for distribution only under such circumstances as may be permitted by applicable law. Readers should be fully aware that this report is for information purposes only. The opinions contained in this report are based on information obtained or derived from sources that we believe are reliable. MIDF AMANAH INVESTMENT BANK BERHAD makes no representation or warranty, expressed or implied, as to the accuracy, completeness or reliability of the information contained therein and it should not be relied upon as such. This report is not, and should not be construed as, an offer to buy or sell any securities or other financial instruments. The analysis contained herein is based on numerous assumptions. Different assumptions could result in materially different results. All opinions and estimates are subject to change without notice. The research analysts will initiate, update and cease coverage solely at the discretion of MIDF AMANAH INVESTMENT BANK BERHAD. The directors, employees and representatives of MIDF AMANAH INVESTMENT BANK BERHAD may have interest in any of the securities mentioned and may benefit from the information herein. Members of the MIDF Group and their affiliates may provide services to any company and affiliates of such companies whose securities are mentioned herein This document may not be reproduced, distributed or published in any form or for any purpose. MIDF AMANAH INVESTMENT BANK : GUIDE TO RECOMMENDATIONS STOCK RECOMMENDATIONS BUY TRADING BUY NEUTRAL SELL TRADING SELL Total return is expected to be >15% over the next 12 months. Stock price is expected to rise by >15% within 3-months after a Trading Buy rating has been assigned due to positive newsflow. Total return is expected to be between -15% and +15% over the next 12 months. Negative total return is expected to be -15% over the next 12 months. Stock price is expected to fall by >15% within 3-months after a Trading Sell rating has been assigned due to negative newsflow. SECTOR RECOMMENDATIONS POSITIVE NEUTRAL NEGATIVE The sector is expected to outperform the overall market over the next 12 months. The sector is to perform in line with the overall market over the next 12 months. The sector is expected to underperform the overall market over the next 12 months.