KUALA LUMPUR: Malaysia Airports Holdings Bhd’s (MAHB) passenger movement to recover in the second half (2H) of 2021 on wider vaccine adoption and easing of travel restrictions, Affin Hwang Capital said.
The firm said the positive progress in the development of Covid-19 vaccines by several manufacturers had paved the way for the recovery of the aviation sector.
Citing the World Tourism Organization (UNWTO) eighth report on Covid-19 related travel restrictions, Affin Hwang said a total of 152 destinations (70 per cent of global destinations) have eased restrictions on international tourism as of November 1, up from 115 (53 per cent) recorded on September 1.
Tourism, Arts and Culture Minister Datuk Seri Nancy Sukri was quoted as saying that the government was considering opening its border to help boost the tourism sector.
“We are positive on the news flows. However, we do not expect the reopening of border in the near-term, in view of the high Covid-19 cases globally and the emergent of new variants of Covid-19
“Instead, we expect the government to gradually ease the travel restrictions starting 2Q2021 after the winter season, peaking of Covid-19 cases in Malaysia and increased adoptions of the Covid-19 vaccines,” the firm said in a report today.
Affin Hwang added that in tandem, MAHB should continue to report quarterly net losses in 1H 2021 before turning profitable in 2H 2021.
“Overall, we expect MAHB to report a lower net loss of RM38 million for 2021 before delivering a profit of RM455 million in 2022 driven by a strong recovery in passenger movement and cost savings from various initiatives implemented during 2020 and 2021,” it said.
Affin Hwang has maintained its “buy” call on MAHB with an unchanged target price of RM6.65.
“Notwithstanding the challenging immediate business outlook and likely financial losses in the next two quarters, we recommend investors look beyond the current weakness and start positioning for an earnings recovery in 2022.
“In view of MAHB’s robust balance sheet, proactive cost containment and cash preservation initiatives, we expect the group to weather through the current crisis without cash calls,” it said.
Source: New Straits Times