KUALA LUMPUR: Malaysia Airports Holding Bhd’s (MAHB) share price resilience should continue to find support from good progress in Malaysia’s vaccination programme, said TA Securities Holdings Bhd.
This is despite the weak data and the challenging near-term outlook, which were crimped by the stubbornly high Covid-19 infections in Malaysia and Movement Control Order (MCO).
As of July 14, the vaccine registration rate has surged to 69.9 per cent, and 8.4 million individuals have received at least one dose of Covid-19 vaccines.
“The pace of inoculation is encouraging with the daily vaccination rate breached the 400,000-mark to 434,828 on July 14, the highest number since the vaccination programme began,” the research firm said in a note recently.
Should this trend persists, TA Securities said Malaysia would enter Phase Two of the National Recovery Plan (NRP) soon as the uptick in inoculation is expected to bring down the infections to below 4,000/day.
“This would bode well for Malaysia to reopen its economy in Phase Four, estimated in November or December this year, when daily infections fall below 500.”
Meanwhile, MAHB’s passenger movements slipped 60.3 per cent month-on-month (MoM) in June 2021 to 187,000.
This was due to a reduction in domestic (67.7 per cent) and internal (21.3 per cent) segments, resulted from the full Movement Control Order (MCO) in June.
For the first half (1H) of 2021, the decline in passenger movements moderated to 84.7 per cent from 85.4 per cent a month ago to 2.9 million.
TA Securities said this is in line with its reduction in traffic forecast of (25.2 per cent) and Malaysian Aviation Commission (Mavcom) traffic forecasts, considering that the upliftment of interstate travel restrictions could spur the fourth quarter of 2021 growth.
“As far as the reopening of the international border is concerned, we opine it would remain closed for the second half of 2021 as the vaccination rates in South-East Asia countries were relatively low, except Singapore.
“However, when the infections in Malaysia are under control, we can look forward to travelling bubbles with countries that would have achieved the herd immunity, including Singapore, Japan, China, South Korea and Australia.
TA Securities has not changed its traffic forecast and maintains MAHB’s financial year ending December 31, 2021, to 2023 earnings projections.
“We reiterate our Buy recommendation on MAHB with an unchanged target price of RM7.49 per share.”
MAHB’s Istanbul Sabiha Gokcen International Airport (ISG) recorded total passenger movements of 2.2 million in June, of which 1.6 million came from the domestic sector and 0.6 million from the international sector.
However, on an MoM basis, June-2021 traffic rose 47.7 per cent, led by increases in international (61.9 per cent) and domestic (42.9 per cent) passenger movements after easing travel restrictions and partial curfews from June 10.
Source: New Straits Times
