KUALA LUMPUR, Dec 24 — Malaysia Airports Holding Bhd (MAHB)’s decision to raise its stake in its Turkish venture failed to lift its share price on Bursa Malaysia today as it slipped to become among the top three losers in the morning session.
As at 12.30pm, MAHB’s share price stood at RM9.63, having declined 15 sen or 1.53 per cent, with 141,900 shares exchanging hands.
MAHB announced that it will be buying an additional 40 per cent stake in Istanbul-Sabiha Gokcen Airport (ISGA) from GMR Group for RM1 billion on top of its current 20 per cent stake.
Hong Leong Investment Bank (HLIB), in a research note, said that MAHB would fund the acquisition through private placement of up to ten per cent of its issued shares at RM8.09 per share which would result in earnings dilution of 9.1 per cent.
HLIB, however, maintained a ‘Buy’ and under review on the acquisition and remained positive given the fact that ISGA was gaining pace from strong traffic growth and earnings which would ensure operational sustainability.
Another research house, Maybank Investment Bank (Maybank IB), has maintained a hold and under review for MAHB with the target price unchanged at RM8.20.
Maybank IB was also positive on this deal as Sabiha Gokcen was a strategic asset with a bright outlook.
“MAHB’s share price could face downward pressure in the following days due to the 10 per cent private placement. We are unperturbed by this and consider it as an opportunity to accumulate the shares at fairer valuation,” said Maybank IB.
Meanwhile, RHB research has downgraded MAHB from a ‘Buy’ to ‘Neutral’ after incorporating the 10 per cent dilution from the private placement exercise.
“We deem the deal as attractive with earnings growth prospects. However there is only a five per cent upside to our new target price of RM10.27 post dilution from the private placement exercise to fund the purchase and stock’s strong rally,” said RHB research. — Bernama
