MAS (SELL) - February Stats

MAS (SELL)

February Stats

• MAS released February statistics showing continued weakness in passenger and cargo demand, largely in line with our forecast.
• With the reported weak statistics, the survivability of MAS within 1H12 remained as a major concern, as the expected losses will eat up its existing cash piles of RM1bn (as at Dec 2011), while debt level remained high at RM5.7bn.
• High possibility of cash call exercise to strengthen balance sheet, fund aircraft delivery and restructuring cost.
• Separately, AirAsia X entered Re-Accommodation Agreement with MAS for its affected passengers following the suspension of services to Mumbai, New Delhi, London and Paris. The deal will contribute RM51.6m revenue to MAS or 0.4% of MAS FY12 revenue.
• Maintain Sell with unchanged Target Price of RM0.82.

 Source: HLIB Research - 28 March 2012