$4 valuation by citigroup

MAP has continued to deliver, with Sydney Airport reporting its interim result in line with our expectations.
The 1H06 EBITDA of $261m (CIR est $263m) represented 7% growth over pcp. Of a significantly expanded earnings base, we
forecast 8% growth in FY06e EBITDA to $535m (from $493m in FY05).
A threefold increase in capital expenditure (to $128m) to accommodate new generation aircrafts and commercial developments
should extend the growth cycle of the airport.
MAP has not generated any performance fees in 2H05e. Consequently, our FY05e EPS has been upgraded by 2% to 19.1cps
(from 18.7cps). However, EPS in FY06e has been downgraded by 2.7%.
Separately, a periodical review of assets may put MAP’s non-controlling interest in Rome Airport on the block. Compared to its
peers, Rome Airport has performed below expectations due to bureaucratic delays with lifting airport charges and dependence
on problem-ridden Alitalia.
With a potential catalyst in the stock in the form of a likely 50cps capital return from the sale of its interest in Rome Airport, and
attractive distribution yield of 7.1%pa, we view MAP as an attractive investment.
Consequently, we reiterate our BUY recommendation on the stock with a rolled forward FY06e DCF valuation and an upgraded
target price of $4.00ps (from $3.90ps)