- Above expectations. MAS' 2Q12 core net loss of MYR160.4m (-68% YoY, -55% QoQ) was better than our MYR198.6m loss forecast, and significantly ahead of consensus thanks to capacity cuts on multiple loss-making routes, efficiency gains from new aircraft in the fleet and better marketing efforts.
- We upgrade MAS to a BUY as we factor in the financing support that MAS has obtained (±MYR9.0b in bonds, senior debt and leases) which enables an uninterrupted flow of new aircraft, and on the prospect that MAS will breakeven in 2H12. Our new TP of MYR1.20/share is based on a raised 2013 PER of 12.0x (from 10.0x), 2x above the mid-cycle valuation of the aviation cycle; it also implies an adjusted EV/EBITDAR of 6.4x – still in line with regional peers.
Source: Maybank Research - 15 August 2012
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