The research house has affirmed its “buy” call for MAHB at RM6.90, with an unchanged target price (TP) of RM8.50.

Alongside the recovery in air travel, HLIB said MAHB will also benefit from the improving international passenger mix – higher passenger tariff and spending power – for both Malaysia and Istanbul Sabiha Gokcen International Airport (ISGA) operations.

“We expect MAHB to continue record earnings recovery in coming quarters, achieving RM544 million in financial year 2023 (FY2023) and a new record earnings of RM749 million in FY2024,” said HLIB.

“The finalisation of the operating agreement (OA) and regulated asset base (RAB) will further strengthen MAHB’s position in airport development,” it added.

MAHB reported robust core earnings of RM64.6 million during the first quarter of the fiscal year 2023 (Q1 FY2023), noted HLIB.

Passenger traffic recovery

Commenting on the rebound of the air travel industry, HLIB remarked that passenger traffic in the first half of 2023 recovered strongly to 38.8 million passengers for Malaysia.

“This is still on track to achieve HLIB’s projection of 87.6 million for 2023,” said HLIB analyst Daniel Wong.

Additionally, both domestic- and foreign-based airlines are still reactivating their grounded fleets and reinstating their capacities back to pre-pandemic levels.

Moving forward, HLIB expects MAHB to continue to record stronger core earnings in subsequent quarters.

“We are projecting earnings of RM524 million in FY2023 and RM749 million in FY2024, which will be a new record year, higher than the pre-pandemic 2019 level.

“Management expects the strong recovery in revenue will be partially offset by the expected higher cost structure in FY2024,” Wong concluded.

As at 12.25pm, MAHB’s share price was up by 1 sen (0.14%) at RM6.91, giving it a market capitalisation of RM11.53 billion.