The Macquarie View

Action and recommendation
We have upgraded our recommendation to Outperform.
With recent fears on bond repricing and a fall in the share price, Sydney now provides value to investors at EV/EBITDA of 18.8x (AIA 21.2x), a yield of 5.0% (AIA 2.9%) and 3Y growth of 7% pa. Moreover, Sydney is able to warm the chill of the bond wind, through its five-year repricing amid the aeronautical price regulation regime. Finally, Sydney growth outlook is strengthening with opportunities to
1) develop T3,
2) resume the Jetbase, and
3) develop WSA, creating a growth path that will last 10-15 years.  We have increased our recommendation to outperform SP $7.45