AirAsia Group Bhd (AAGB) is the largest low-cost carrier in Asia. It operates nine airlines in six countries across Asia. As of 9 June 2019, AAGB is valued at RM 9.7 billion in market capitalisation. In this article, I’ll bring an update on the airline’s latest financial results, major growth plans and valuation figures. Thus, here are 8 key things to know about AAGB before you invest.
Source: AAGB’s Annual Reports
Source: AAGB’s Annual Reports
Nations |
Revenue 2018 (RM Million) | Net Operating Profits 2018 (RM Million) | Domestic Market Share (%) |
Malaysia | 8,900 | 4,806 | 58% |
Thailand | 4,866 | 7 | 32% |
Philippines | 1,602 | -155 | 20% |
Indonesia | 1,191 | -266 | 2% |
India | 1,317 | -365 | 5% |
Japan | 69 | -162 | n/a |
Source: AAGB’s Annual Report 2018 & Airasia 3.0 Presentation in April 2019
Source: AAGB’s Annual Reports
Figures in RM Million unless stated otherwise
Year | Q2 2018 | Q3 2018 | Q4 2018 | Q1 2019 | Total |
Revenues | 2,624 | 2,609 | 2,823 | 2,780 | 10,836 |
Earnings | 362 | 916 | -395 | 96 | 979 |
EPS (Sen) | 10.8 | 27.4 | -11.8 | 2.9 | 29.3 |
Source: AAGB’s Quarterly Reports
Source: Airasia 3.0 Presentation in April 2019
Digital
AAGB remains big on data. Moving forward, it has identified a number of new data sources to drive expansion across AAGB’s ecosystem. They include statistics in airport terminals such as
– Passengers’ queue time.
– Weight of Passengers and Cabin Baggage
– Passengers’ Movements
– Counter Transactions … etc.
They enable AAGB to identify brand new sources of revenues and also opportunities for cost reductions.
Technology
AAGB intends to further develop its marketplaces which include a few major websites such as Airasia.com, BigPay, and Teleport.
Airasia.com will be developed into a comprehensive travel and lifestyle marketplace which encompasses online travel, ecommerce, media, and ride-hailing activities such as transportation and food delivery.
BigPay is one of the fastest growing fintech companies in Malaysia with over 0.5 million users to-date since its launch in January 2018. BigPay is Asia’s Money App which offers services such as e-wallet, remittances, & loans to millenials and travelers in Southeast Asia.
Teleport is established to simplify cargo supply chain, thus, significantly reducing air cargo fulfillment from 138 hours to around 12 hours. Thus, it allows AAGB to tap into rising demand for both social commerce and ecommerce across Southeast Asia.
VIA’s Verdict
AAGB has been aggressive in expanding its markets and sources of income. This had resulted in stable growth in revenues for the past 10 years. But, it recorded a lot of one-off transaction gains and losses and has been (and will be) affected by the ups and downs in fuel prices. They caused AAGB’s earnings to be volatile as shown in the graph below. It has caused AAGB’s stock price to be volatile too for the last 10 years.
Source: AAGB’s Annual Reports
Source: Google Finance
Are you able to find the resemblance between the two charts above? Volatility in profits had caused stock prices to be volatile.
The question is: ‘Would you invest in AAGB at RM 2.90 a share today?’
https://valueinvestasia.com/is-airasia-group-bhd-a-great-bargain-now/
Chart | Stock Name | Last | Change | Volume |
---|
Created by Tan KW | Sep 17, 2024
Created by Tan KW | Sep 17, 2024
Created by Tan KW | Sep 17, 2024
Created by Tan KW | Sep 17, 2024
Created by Tan KW | Sep 17, 2024
10billion and growing company with pe of only 9, it is definitely worth more than rm2.7 imo
2019-06-23 22:03
(US/CHN trade war doesn't matter) Philip
Instead of using or, fleet size, market share etc, the most important metric in investing in an airline is one which no one seems to pay attention to.
What is air Asia seat cost per mile (or km). It doesn't matter how big your market share is or how many planes you own. If your total seat cost per mile is lower than the competition and still profitable, then the whole system works.
Problem is when fuel and ancillary costs escalate and the selling price per seat doesn't make sense, then losses can loom far faster than one can imagine.
My flight from kk to kl cost me rm214 return ticket. It's definitely good for me and keeps a full flight, but is it a workable system for air Asia investors?
2019-06-23 22:13
tony Fernandez wants people to value AA as internet company but Malaysia too small and no scale
2019-06-24 07:11
Hahahaha,
Good morning qqq3 the pro trader, who trade the good, the worst, the ugly and the beautiful why hold only slow moving 4 stocks. Shouldn’t you change to fast and furious Dayang, Naim, Yinson, Hibiscus or even Inari for trading?
Posted by qqq3 > Jun 11, 2019 9:25 AM | Report Abuse
this rally, I only have 4 stocks....Ekovest, Armada, Jaks, Teo Seng.....all also do just as well as Dayang yesterday.......
2019-06-24 07:33
Dayang I bot at 1.02 sold at 1.09...next day 1.20.............of course I sold 1 day too soon.
2019-06-24 07:42
G20 meeting this week end................I have one week window to play......no more.
2019-06-24 07:44
Hahahaha,
qqq3 learn from CPTeh how to day trade for 3 cents profit. Then you have many more days to trade for profit but remember to cutloss when things go the other way othwrwise CPTeh will laugh at you for holding high.
2019-06-24 08:15
Value Investor Coo1eo
Check soem typo. Also where is the point of the impending social dividend declared. 90sen???
2019-06-23 14:00