KUALA LUMPUR, Jan 30 — Kenanga Research (Kenanga) expects tourist arrivals in Malaysia to jump almost four-fold to 9.6 million in 2023 from an estimated 2.5 million a year ago.
The research house said the projection is supported by the resumption of both business and leisure air travel globally as the Covid-19 pandemic comes to an end, the revocation of all on-arrival quarantine and testing requirements in Malaysia from Augusut 1, 2022 and the gradual reopening of China.
“The gradual reopening of China is positive for the country as historically, Chinese tourists account for an estimated 12 per cent of total tourist arrivals in Malaysia,” it said in a research note today.
Kenanga said that this should underpin growth in Malaysia Airport Bhd’s (MAHB) passenger throughput demand in 2023, thus it has maintained its ‘market perform’ call on MAHB with a target price (TP) of RM7.
On the financial performance, Kenanga said it had narrowed MAHB’s net loss forecast for financial year 2022 (FY22F) by 6.0 per cent and raised FY23F’s net profit by 3.0 per cent, backed by the FY23-24F rise in passenger throughput (+15 per cent and +9.0 per cent to 116 million and 126 million, respectively).
Meanwhile, MIDF Research (MIDF) revised its FY23F passenger traffic recovery downward to 85 per cent from 95 per cent previously due to the slower return of Malaysia AirAsia’s (MAA) aircraft, but expect stronger growth from 2024 onwards as local carriers rebuild their fleets.
It said Malaysia’s passenger traffic recovery is expected to be mainly supported by the reactivation of 50 per cent of MAA’s remaining aircraft that have yet to receive airworthiness certificates.
“The downward revision is mainly due to slower-than-expected return of MAA’s operational aircraft which had missed its initial target of 65 operational aircraft by end-2022,” it said in a note.
As such, MIDF maintained its ‘neutral’ call on the aviation sector amidst anticipation of a brighter future as China presses on with its reopening.
“We should expect to see an improving international passenger mix this year, which should help the aviation players rebuild their profitability, given that they are high-yield passengers,” it added.
The research house downgraded its call on MAHB to ‘neutral’ from ‘buy’, with a TP of RM7.45, while retaining its ‘neutral’ call on Capital A with a revised TP of 70 sen.
At 10.50 am, MAHB shares eased by one sen to RM7.25, while Capital A added 1.5 sen to 76.5 sen.
— Bernama
