KUALA LUMPUR: Malaysian Airline System Bhd (MAS) offers a bargain investment for traders willing to bet on a sale, as a turnaround stokes calls for the government to exit its stake.
MAS fell to an all-time low this year amid competition from budget airline AirAsia Bhd. Now the company is projected to post its first profit in four years in 2014 on record revenue, according to analysts' estimates.
With the carrier on the mend, the government may seek to shed its majority ownership by selling or breaking up the US$1.6 billion (RM5.2 billion) airline, said Malayan Banking Bhd.
Among those calling for a sale are former premier Tun Dr Mahathir Mohamad. While the government may wait for the airline's shares to recover before seeking buyers, RHB Research Institute Sdn said potential acquirers include entrepreneur Tan Sri Syed Mokhtar Albukhary.
"Selling parts of the company is definitely viable," said Ang Kok Hen, chief investment officer at Phillip Capital Management Sdn. "They must show some results before people are confident to buy."
MAS is forecast to generate a net income of RM88 million next year from sales of RM15.6 billion, according to analysts' forecasts compiled by Bloomberg.
"It will make more sense for Khazanah to sell at that time, once the group has restored profitability," said Jerry Lee, an analyst at RHB Research.
"By that time, the share price has rallied. MAS is doing the right thing with its turnaround." Bloomberg