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OSK trims Malaysia Airports’ fair value

KUALA LUMPUR, Jan 30 – OSK Research cuts Malaysia Airports Holdings Bhd’s fair value to RM7.23 per share from RM8.00, saying higher user fee and operating costs will hurt the country’s largest airports operator’s profit margin going forward.

“While the macro outlook continues to be promising for Malaysia Airports, driven by the resilient low cost travel segment, we highlight that the higher user fee payable to the government coupled with the steeper costs to operate new low-cost airport Kuala Lumpur International Airport 2, could put a dent in its earnings,” OSK said in a research note today.

Maintaining its ‘buy’ rating on the counter, OSK said it trimmed its financial year ending Dec 31, 2013 and FY14 numbers on Malaysia Airports by 35 per cent and 32 per cent respectively.

“Nonetheless, prospects for FY14 onwards will be promising as its free cash flow turns positive, the first since FY07,” the research house said.

As of 0259 GMT, the shares rose 0.36 per cent to RM5.54 per share, outperforming the benchmark stock index’s 0.23 per cent drop. – Reuters

 

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