Overview
Macquarie has kept an outperform recommendation on MKIF (KRX:088980), citing a recent regulatory change that materially increases the leverage infrastructure funds may employ. The report, released Tuesday, notes that amendments to the Public Private Partnerships in Infrastructure Act raise the cap on fund-level leverage for listed infrastructure funds to 100% of equity, up from the previous 30% limit.
Operational results and asset performance
In the first quarter of 2026, MKIF reported a 2% year-over-year increase in toll road traffic. That aggregate gain occurred despite a decline in traffic on the Incheon International Airport Expressway after competing routes opened; the company is engaging authorities about potential compensation under the terms of existing concession agreements to address traffic diversion.
Freight throughput at the Busan New Container Terminal fell by 4% year-over-year in Q1 2026 amid geopolitical uncertainty. Macquarie highlighted that this terminal has been a drag on dividend contributions since 2024.
On the digital infrastructure side, leasing agreements now cover 99% of the targeted IT load at MKIF's Hanam data center, with the project expected to reach full ramp-up by 2027.
Implications of the regulatory change
Under the revised PPP legislation, MKIF could deploy significantly more debt at the fund level. Macquarie quantified the potential leverage capacity for MKIF at Won3.3 trillion. Practically, the rule change allows MKIF to fund additional acquisitions and capital needs through borrowings rather than issuing new equity.
The report also notes that several of MKIF's assets are scheduled to approach the ends of their concession periods over the next three to four years, a timing consideration for asset management and potential reinvestment decisions.
Valuation and forecasts
Reflecting the softer performance at the port business, Macquarie reduced EPS estimates for MKIF by 6% for 2026 and by 7% for 2027. The broker lowered its price target by 4% to Won14,000, basing its valuation on a dividend discount model.
Key takeaways
- Regulatory amendment raises listed infrastructure funds' fund-level leverage cap to 100% of equity, increasing MKIF's debt capacity to Won3.3 trillion.
- Toll road traffic rose 2% YoY in Q1 2026 despite diversion at the Incheon International Airport Expressway, where compensation talks are ongoing.
- Busan New Container Terminal volumes fell 4% YoY in Q1 2026 and have weighed on dividends since 2024; Hanam data center leasing is at 99% of targeted IT load with full ramp-up expected by 2027.