[Click eStock] "Macquarie Infrastructure, Interest Rate Stabilization... Investment Appeal Up"

Samsung Securities Report

[Asia Economy Reporter Minji Lee] Samsung Securities evaluated on the 1st that Macquarie Infrastructure has become more attractive for investment due to interest rate stabilization.

Macquarie Infrastructure's operating income and net profit in the 4th quarter increased by 8% compared to the previous year. This was influenced by increased interest income from the Incheon-Gimpo Expressway acquired in the first quarter of last year. Looking at the characteristics of portfolio assets, the road sector saw a 6% increase in average daily traffic and an 8% increase in toll revenue compared to the previous year. Toll revenue from Incheon International Airport Expressway and Incheon Bridge, which had poor performance due to the pandemic, also recorded strong turnarounds with increases of 40% and 34%, respectively.

BNTC (Busan New Port) sales increased by 6%, but earnings before interest, taxes, depreciation, and amortization (EBITDA) decreased by 2%. This reflected the impact of one-time costs such as severance pay and equipment maintenance. However, the performance improvement trend that began in 2020 continued. In the city gas sector, sales of Haeyang Energy and Seorabeol City Gas increased by 46% and 60%, respectively, due to the rise in the average wholesale price by Korea Gas Corporation, but EBITDA slightly contracted due to seasonal factors.

Researcher Kyungja Lee of Samsung Securities said, “Macquarie Infrastructure has continued to expand its portfolio by reinvesting in the Seoul-Chuncheon Expressway using its financial strength even in the second half of last year when the market was sluggish. Since it has maintained dividend growth for 17 years since its listing, its attractiveness as an income-type product is expected to recover if market interest rates stabilize.”

The expected dividend yield this year is 6.6%, and dividends are expected to increase slightly compared to the previous year. Assets with early expiration of Minimum Revenue Guarantee (MRG) are the Seoul-Chuncheon Expressway and Incheon Bridge. The Seoul-Chuncheon Expressway is already recording income exceeding the MRG, and Incheon Bridge has also exceeded the MRG again since the second half of last year as it recovered from the pandemic impact. Researcher Lee said, “The other five assets with ongoing MRG have matching concession agreement periods and MRG periods, resulting in low risk.”