KUALA LUMPUR (April4): MIDF Research has maintained its Sell rating on Malaysian Arline System Bhd (MAS) with a target price of RM1.35 after the airline unexpectedly discarded its plan to launch a new premium regional airline.
MAS had said that it was slight business module realignment for the regional airline initiative. Strategy and objective of short-haul operation will remain unchanged while the premium regional service will instead offer in-house under MAS brand.
MIDF Research in note Wednesday aid that the decision to scrap the new airline came in as a surprise and would possibly put a question mark on MAS’ ability to execute its turnaround plan.
“There are still many structural weaknesses faced by MAS such as its sliding position in the premium category and over-staffing, which MAS need to tackle.
“Hence, we reiterate our current view with SELL recommendation and our target price to RM1.35 by pegging its Price-to-Book value in FY12 to 1.8 times,” it said.
MAS had said that it was slight business module realignment for the regional airline initiative. Strategy and objective of short-haul operation will remain unchanged while the premium regional service will instead offer in-house under MAS brand.
MIDF Research in note Wednesday aid that the decision to scrap the new airline came in as a surprise and would possibly put a question mark on MAS’ ability to execute its turnaround plan.
“There are still many structural weaknesses faced by MAS such as its sliding position in the premium category and over-staffing, which MAS need to tackle.
“Hence, we reiterate our current view with SELL recommendation and our target price to RM1.35 by pegging its Price-to-Book value in FY12 to 1.8 times,” it said.
