FBMKLCI
1865.28 -2.07pts (-0.11%)
Volume 2.023b Value 1.965b
1) The KLCI closed lower as the US market broke its 6 day
winning streak after a surprise drop in new homes sales and weaker earnings
from U.S companies disappointed investors. In the regional market, sentiments
were weaker in the overall market as NIKKEI -0.97%, SHCOMP -0.50% trended lower
while the HSI rose just +0.24%. In the local market, the broad market remained
jittery as the INDUSTRIAL index led the
fall with PETGAS -1.09%, PCHEM -0.72%, KSENG -3.77%, LAFMSIA -1.20% weighing
the sector down. Market breadth was negative today with losers beating gainers
by 485 : 324. Futures closed at 1861.5 (4 pt discount).
2) Heavyweights : PETGAS -1.09% RM23.60, MAYBANK -0.40%
RM9.96, PCHEM -0.72% RM6.85, IHH -1.00% RM3.93, FGV +1.77% RM4.59, DIGI +0.56%
RM5.34, SKPETRO +0.69% RM4.32, AXIATA +0.30% RM6.65
3) DBT : PDZ 235.548mil @ RM0.18 (27.09% PUC @ 12.5%
premium possible Robert Tan's Stake), OMEDIA 50mil @ RM0.15 (28.104% PUC @ 12%
discount)
4) Situational:-
ALAM -4.84% RM1.57
- The counter was released after 2 days of suspension following the
announcement of investors Tan Sri Quek Leng Chan and his associate, Paul Poh,
are buying a 15.53% stake in Alam Maritim Resources Bhd at RM1.35 per share.
ALAM will sell them 123 million shares, which will raise some RM166.05mil where
the proceeds will be used to acquire a new OSV vessel as well as retire some of
its debt.
5) Airport
1st Qtr Revenue -24% RM781m PBT -3.8% RM 128.7m Net +2.1%
RM128.7m EPS 10.2sen
17% higher than cons(f) RM426.9m
The consolidated revenue of the Group for the current
quarter under review was lower than the same corresponding period in the
previous year by 24.0% or RM246.1 million. Included in the airport operations’
revenue in the current quarter under review was the construction revenue of
RM121.6 million as compared to the RM454.6 million recognised in the
corresponding period in the previous year. Construction revenue in the current
quarter was recognised in relation to the construction of klia2 while in the same
period last year, the construction revenue was recognised for construction of
klia2 and the expansion of Penang International Airport. Expansion of Penang
International Airport was completed at the end of 2013.
Excluding the construction revenue of RM121.6 million,
the airport operation’s revenue was RM620.8 million, an increase of 15.2% or
RM83.9 million from RM536.8 million in the previous corresponding quarter. The
improvement was mainly attributed to an increase in the aeronautical revenue of
22.1% or RM60.5 million to RM334.6 million from RM274.1 million. The
improvement in aeronautical revenue was driven by higher passenger and aircraft
movements as well as the implementation of new Landing charges with an increase
of 9% in 2014 and the increase is effective 1 January 2012, 1 January 2013 and
1 January 2014 (compounded annually).
In addition, the Group has started to recognise Marginal
Cost Support Sum on Passenger Service Charges ("MARCS PSC") for
passenger travelled on and after 12 February 2014. As stipulated in the
Operating Agreement signed on 12 February 2009 ("OA"), the Benchmark
PSC rate is revised in every 5 years based on the agreed calculation as stated
in the OA. The 2nd Tariff Cycle revision was effective 12 February 2014. MARCS
PSC of RM11.6 million was recognised for the difference between actual PSC and
Benchmark PSC rate.
The favourable variance in the airport operations’
revenue was also contributed by an increase in the non-aeronautical revenue of
8.9% or RM23.4 million to RM286.1 million from RM262.7 million. The improvement
was driven by higher commercial and retail revenue on the back of higher
passenger growth. The Group’s retail business improved by 14.3% or RM20.3
million due to the 18.6% passenger growth and various promotional activities.
The Profit before tax and zakat (PBT) for the current
quarter under review was lower by 3.8% or RM7.1 million as compared to the
previous corresponding period.
Included in the PBT for the current quarter was a
construction profit of RM5.2 million, a decrease of 73.4% or RM14.5 million as
compared to the same period in the previous year.
Excluding the construction profit, the PBT for the
current quarter under review was RM173.7 million, an increase of 4.4% or RM7.4
million from RM166.3 million in the previous corresponding quarter mainly
attributed to the positive growth in revenue.
Total cost (excluding construction cost) for the current
quarter under review increased by 19.4% or RM84.1 million mainly due to the
significant increase in user fee to RM63.1 million from RM25.8 million, higher
utilities charges by 19.1% or RM9.6 million and higher employee benefit by
12.8% or RM16.5 million.
The higher user fee expense was attributable to the full
recognition of user fee in the income statement. As set out in the OA, MAHB is
required to pay user fee to the Government of Malaysia which is equal to a
specified percentage of revenue derived from activities at the airports as a
consideration for the Concession Rights granted to MAHB. The amount which had
been recognised in the income statement represents half of the total user fee
payable to the Government of Malaysia, while the other half is to reduce the
amount due for the Balance Residual Payment arising from MAHB’s restructuring
exercise that was completed in February 2009. Upon the full settlement of the
Balance Residual Payment in April 2013, the user fee is fully recognised in the
income statement.
While registering strong passenger growth in the 1st
quarter, the MH370 incident may dampen sentiment on air travels in the short
term, coupled with selling at prospective FY14 19.7x PER, we advocate a buy on
weakness in view of its long-term growth potential & monopoly position in
Malaysia.
6) Market: Consolidation is likely to persist to digest
the recent surge in volume of market leaders.