Aviation (Overweight)
MAHB Championing Tariff Hikes
§ MAHB has again announced new airport charges beginning 15 November 2011, which was deferred by the government back on 14 September 2011.
§ The new rates for international passenger departing from airports (ex-LCCTs) will be increased from RM51 to RM65 (RM14 previously subsidized by government) while those from LCCTs will be raised from RM25 to RM32.
§ Aircraft landing charges will be increased by 9% p.a. and parking charges will be increased by 18% p.a. for the next 3 years starting January 2012.
§ Positives to MAHB, and slight negatives to AirAsia and MAS, as we expect airlines to pass-through the additional cost to consumers, while the additional cost are very marginal to travelling cost and unlikely to have significant impact on travelling demand.
§ Separately, MAHB also announced setting up a new JV (23:77) with Tenaga, to supply chilled water and electricity to new KLIA2. MAHB expects the JV to contribute RM5m p.a.
§ Raised MAHB FY12-13 earnings by 7.2% and 10.1% respectively.
§ Recommendation:
§ Maintained BUY on MAHB with higher target price of RM7.00 (Previously RM6.50) based on DCF to equity.
§ Maintain BUY on AirAsia with TP of RM4.50.
§ Maintain SELL on MAS with TP of RM1.19.
Enjoy the ride toward 1500-1513 pts
§ Riding on the overnight bullish Wall St and Europe markets, FBM KLCI is expected to continue its uptrend towards 1500 psychological barrier and probably to retest the 200-d SMA (now at 1513) after a mild profit taking consolidation. Immediate supports are 10-d SMA (1450) and 50-d SMA (1435) pts.
Coastal: Targeting RM2.10-2.25 amid bullish technicals
§ Based on the weekly and daily charts, promising trend and momentum readings as well as rising +DMI suggest COASTAL could stage a meaningful upside towards RM2.10 (38.2% FR and upper channel) and RM2.25 (200-d SMA & 50% FR) in the short term. Supports are RM1.80-1.85. Cut loss below RM1.80.
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