Shares of Manas Airport are among the most sold and bought on the domestic stock market. Today their price is in the range of 750-800 soms. However, according to Ruslan Idyrov, chief analyst and partner of Royal Inc, the value of Manas securities is underestimated.

The material is not a call to buy shares of Manas OJSC or other financial instruments. Analysts' estimation regarding growth of shares' yield and their undervaluation is based on forecast indicators. Share market is subject to various factors, including economic, political and market risks, which can lead to unpredictable results. Therefore, all decisions to acquire shares should be made by the investor independently, taking into account possible risks and his/her own financial position.

In the first six months of 2024, the revenue of Manas Airport amounted to 4.4 bln KGS, up 4% compared to the same period of 2023. In general, if we look at the main financial indicators of the company, we will see the preservation of positive dynamics of development.

Thus, at the end of last year, the airport's revenue reached 15.1 billion soms. Growth by 2022 - by 1.73%, by the indicator of 2021 - by 49.09%. In general, the schedule of the company's profitability from 2017 to 2023 reflects a stable growth of revenue, on average by 13% per year.

The only exception was in 2020, when revenue fell sharply due to quarantine measures imposed in the context of a pandemic. The closure of borders and suspension of air travel led to a significant drop in passenger traffic and, as a result, the company's revenue.

“However, already in 2021, revenue recovered quickly, not only returning to the pre-crisis level, but also exceeding it thanks to accelerated growth rates,” Ruslan Idyrov notes.

Manas' net profit also increases from year to year. Thus, if in 2014 it was at the level of 834.2 million KGS, in 2018 it reached 1.6 billion KGS, and by the end of 2023 it increased to 5.1 billion KGS.

In addition to the increase in revenue, the investment review prepared by Royal Inc. shows that the company has significantly improved its profitability. In 2017, it was around 25% and by the end of 2023, it has reached 33%.

“This shows that the operational efficiency of the company has improved. Also important indicators of the company's success are liquidity ratios. They play a big role in assessing financial stability and show the ability to repay short-term liabilities with its current or liquid assets,” explains the chief analyst of Royal Inc.

Thus, the current liquidity ratio (the ability of the enterprise to repay liabilities at the expense of current assets) of the airport at the end of last year amounted to 10.06%. And the absolute liquidity ratio, which characterizes the ability of the organization to instantly repay current liabilities only at the expense of its own money, without the need to sell liquid assets, was 6.56%.

“We see that since 2020, the company's profitability has demonstrated stable growth in absolute terms, despite the slowdown in growth rates. Plus the company has high liquidity and financial strength. Yes, there is a slowdown in growth rates, but profitability has been increasing for the last three years,” the analyst explains.

Besides, in his opinion, the probability of depreciation or significant decrease in the value of MAM shares is extremely low. The state, being the key shareholder of 79.0533% of shares (held by SAUGI), supports the company. And high demand for passenger and cargo air transportation and the fact that Manas airport is an absolute monopolist in Kyrgyzstan make its income stable.  

Thus, today the shares of Manas International Airport are an attractive investment asset. They offer investors the prospect of profit both through dividends and the probable growth of their market value.

In addition, Manas OJSC has chosen an attractive dividend policy for shareholders - the company regularly allocates money to pay income on its shares. For example, dividends per share for 2023 amounted to 46 soms. The company steadily allocates 25% of net profit for their payment, which meets the minimum requirements for joint stock companies in the country.

However, from 2017 to 2020, the company has been increasing the share of profits allocated to dividends, in some cases reaching 50-75% of net income. This is rather a deviation from standard practice.

“On the Kyrgyz Stock Exchange, Manas Airport shares are traded at a price of 800 soms per unit, and at the end of the last transaction it decreased to 770 soms. At the same time, the book value of the company's shares is currently 1 thousand 195 soms. This allows us to assume that the shares are currently undervalued by the market. Taking into account the possible growth of the share price to its book value and dividend yield of 5%, the total expected yield when buying shares at 800 soms may amount to 55%”, - Ruslan Idyrov concluded.