RHB Research projects a positive turn for the aviation sector, foreseeing considerable revival for the domestic operations of Malaysia Airports Holdings Bhd (MAHB) in the near future. As airlines steadily regain their capacities and Chinese travellers gradually resume their travels, brighter skies are on the horizon.
Today’s research note revealed a surprising fact; the recovery rate of China’s passenger traffic in March was merely 19% of the numbers seen in 2019. However, RHB group is optimistic about achieving over 60% recovery rate from China by the close of 2023.
In the first quarter of 2023, MAHB triumphantly reported a core net profit of RM79 million, a tremendous rise of over 100% from both the preceding quarter and year. This is an impressive feat considering it’s a typically weaker quarter for air travel due to off-peak season, particularly affecting its Turkey operations.
RHB Research indicates a lukewarm sentiment pervading the transport sector since the latter half of 2022 due to ongoing inflationary pressures and drastic correction in freight rates. They continue to endorse service providers in the logistics and transportation sectors — especially third-party logistics (3PL) players boasting diversified portfolios resilient against the currently weakening freight environment.
MAHB joins their list of top picks, banking on the upward trend of the aviation industry’s recovery.
Despite the challenging operating environment, freight forwarders and third-party logistics companies like Tasco Bhd and FM Global Logistics Bhd have broadly met expectations. Tasco ended its 2023 fiscal year with record-breaking annual earnings, aligning with estimates despite concerns over freight forwarders’ earning prospects. April and May saw lower-than-expected volumes, attributed to Aidil Fitri festivities and extended Golden Week holidays in Japan and China.
With an increase in shipment volumes in June and July, Tasco’s management exhibits caution regarding growth momentum. Nevertheless, their diversified clientele base and integrated logistics services tax incentives could provide a safety net against sector challenges.
[Source: Malay Mail]