AirAsia Berhad TP: RM1.98 (+96.3%)

Good Opportunity to Accumulate Last Traded: RM1.01

THIS REPORT IS STRICTLY FOR INTERNAL CIRCULATION ONLY* BUY
Tan Kam Meng, CFA Tel: +603-2167 9605 kmtan@ta.com.my www.taonline.com.my
Review



Bangkok bombing.

Management is of the opinion that the tourism sector
would be able to recover fast from the recent bombing. However, we
believe that the incident would indirectly affect Malaysia and Singapore’s
tourism sectors and this does not bode well for airline operators as it could
hit the seasonally high 4Q sales in 2015.


Dealing with IAA’s negative capital position.

A new plan was proposed
for AirAsia to convert some of its receivable (ie, IAA) to IAA’s new issuance
of non-voting redeemable and convertible preference share. This will help
to address the negative equity position in IAA while not violating the
maximum 49% foreign shareholding rule. In the meantime, the company is
in discussions with existing and new shareholders about equity capital
injection (indicative USD40mn) and issuance of convertible bond
(USD150mn). The proceeds received will be used to retire some of the debt
owing to AirAsia.


Hedging position.

For jet fuel, AirAsia maintained the hedge at 50% of fuel
requirement at an average of USD88/bbl. However, the company is
unhedged for 2016 and this would mean a big boost to cost saving and
earnings if jet fuel stays at current level of USD58/bbl. For USD borrowing,
AirAsia hedged 36% of its borrowing used to finance the aircraft purchase.
Of the balance 64%, 37% of the borrowing is connected to the aircraft
finance for its affiliate’s operations, which the company will receive lease
income in dollar. This would mean the unhedged position is only 27% of
the group’s borrowing.


Valuation


Given the change in earnings estimates, we downgrade the target price to
RM1.98 (from RM2.62 previously) based on unchanged 13x CY16 EPS. We
expect foreign selling to continue weighing on the stock price in the near
term.

However, we maintain our Buy recommendation and 13x PE
valuation as AirAsia’s fundamentals are expected to be stronger than before,
underpinned by lower jet fuel price and lessening competition. As such, we
see the current price weakness as a good opportunity to accumulate.

The worst place to be in... for at least the next 1 to 2 years.... O&G counters

3 or 4 of Armadas FPSO and many more OSVs are in offshore in Nigeria.. North Sea...

In fact..... AFREN PLC is already bankrupt

Ya ya..... not sustainable... means the offshore oil majors will go kaput first as the shale frackers have even lower cost now due to advancement in technology.... offshore oil majors especially those in Nigeria.. North Sea... will kaput sooner than shale frackers... Armada will kaput before the shale frackers

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supernova.. congratulations on all your O&G counters...

WTF how can you not see this coming???!!!

Crappy la you...

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Fact is if you seriously think AirAsias price now has not overshot its FA... you would not be here now still looking forward to buy Airasia...

In fact.. I won't be surprised if you have bought...

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I myself have said Macquarie has predicted RM 3.98 by SEP.. anything more than this is from bad sentiment from bad government

If there is no support from ahjib the KLCI 1400 long ago.....

And.... as if you can foresee the RM down to 4.25... WTF

The country needs cleansing....

hng33 gives up.....aiyo looks like things are happening faster than the fastest contra gun in town....

Mark Wahlberg... you have pissed half the town.. my man

You have pissed off half the town... my man... : )

Mark Wahlberg......

So... you blah blah blah without a clue??

Come on............... what is the real issue??

I know the real issue............ I just want to know if you all know??

AirAsis I can take it................ but the destruction of value in the markets is threatening to become the destruction of economies... that is what I am not ready to see...

No.... just that so many are blah blah blah here I just want to know if they even know the real issue...

So... what do you all think... Can IAA be saved??

Ya ya.. only AirAsia is dropping... ya ya

Fat cat.... bought big before this big drop... have not seen you for awhile.. thought you have jumped from tall building..

Or.. maybe you have... how many lives left.. 1.. 2.. ??

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MMSS

If you had been any good you would have written some things convincing and safe the trouble for those here... but all you have posted were junk...

If.. only you are any good... haiz

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I want to see how ill are we... in the eyes of the righteous

Mark Wahlberg.. occasionally.. just simply adorable...

HaHaHa.... it must be that then... : )

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Jack..


Everytime I see you talk... I don't know why.... but the image of Mark Whaberg will come to mind.. : )

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Calvin....you sold off your 5 or 6 oil & gas counters already??

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Well the sell down may well continue tomorrow... if the righteous ones are pissed off enough...


But it is not over AirAsias FA... AirAsias improving FA


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Some of Wellingtons customers are making a democratic statements by selling.... selling at whatever prices....

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Some of Wellingtons customers are making a political statements by selling....

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You typical money 1st....

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The question is........


Is Malaysia best practices compliant??


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The question is........


Is Malaysia Syariah complaint?

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The selling of AsiaAsia just cannot be explained by its FA.... its improving FA...


The commitment... the religious like devotion... to sell at even below 1.00...at a hugh loss..... this kind of thing can only be possible when it involves ones BELIEF SYSTEM...


Over here.. money 1st...


In highly developed democracies there are more who are more principled... more righteous..

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GENTING.... SOLD AT INFLATED PRICE... MADE GENEROUS DONATIONS... DROPPED OFF THE LIST


Environment or Donations ?


Donations spoiling the environment..??


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GENTING.... SOLD AT INFLATED PRICE... MADE GENEROUS DONATIONS... DROPPED OFF THE LIST


Environment vs Donations ???


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Many of Wellingtons customers would have strict requirements not to invest in countries like North Korea.. due to its lack of transparency.. corruption.. human right abuses.. total disregard of established laws.. etc etc etc

Due to what have happended recently.... sadly Malaysia is now lumped into the pariah group with the likes of North Korea.....


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WELLINGTON MANAGEMENT GROUP LLP is a fund manager also a hedge fund manager... acting behalf of its customers which comprise many and various types of investors... such as retirement funds high.. net worth individuals.. etc etc


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WELLINGTON MANAGEMENT GROUP LLP is not the beneficiary shareholder of its shareholding in AirAsia.....



The actual beneficiary shareholders of its shareholding in AirAsia are its customers.


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WHO IS WELLINGTON MANAGEMENT GROUP LLP???

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Genting has been dropped off from the approved investment list of a foreign fund last week..... because it has become akin to "Non Syariah" compliant.... in the eyes of that foreign fund vis a vis its investment criteria....


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WHO IS WELLINGTON MANAGEMENT GROUP LLP??

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WHO IS WELLINGTON MANAGEMENT GROUP LLP??

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WHO IS WELLINGTON MANAGEMENT GROUP LLP??

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AirAsias only problem is IAA


As r°Moi have posted on 11 Aug 2015..... IAA will be making a profit soon as it is now doing precisely what r°Moi has prescribed...



Stock: [AIRASIA]: AIRASIA BHD
Aug 11, 2015 10:38 AM | Report Abuse

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IAAs problem can be solved and turned around by...


Simply reducing the number of planes that it is leasing from AirAsia by one or two....

At the moment the lease rental and the maintenance charge appear more like fixed costs... even as the load has been low


Yes.. reduce the number of planes being leased to reduce cost.... at the same time increase the load by refocusing on the high yielding international routes... and IAA is fixed



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....

Meanwhile, Indonesia (IAA) will reduce its fleet size by 4 aircraft to operate at its optimal capacity and improve aircraft utilisation by terminating non-profitable routes and focusing more on international routes.

Source: PublicInvest Research - 21 Aug 2015

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Slap Slap Slap


Wake up.... you shaken and stirred by all the negatives others.have posted



GET A HOLD OF YOURSELF AND FOCUS


FOCUS:

The only problem with AirAsia is IAA... but that is going to be solved soon.. as IAA is now doing exactly what have been prescribed by r°Moi...


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God bless.... Going for a facial tomorrow..

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Only hope for Malaysia is.... when the tide turns... foreign funds will come back as ferociously...


Foreign funds which have left are not exactly making money in equity elsewhere... as it has been dropping from Landon Paris and New York.....and.. Shanghai Tokyo and Seoul...


God bless......

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Ya.... after one big round that have taken 10 years.. now USA to reclaim its pride again... want to be the world's Taiko again... so roil the rest of the world... despite what World Bank and IMF are saying..

But... the world is so interconnected now... you just cant hurt the others without hurting yourself...

Iphone the iconic smartphone from the US... US recovering ought to be fantastic to a brand from US right?? But... no it ain't gonna do well cos China is not doing that good...

So... world markets dropping like a ton.... so too DJIA dropping like a ton

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Ya.... after one big round that have taken 10 years.. now USA to reclaim its pride again... want to be the world's Taiko again... so roil the rest of the world...

But... the world is so interconnected now... you just cant hurt the others without hurting yourself...

Iphone the iconic smartphone from the US... US recovering ought to be fantastic to a brand from US right?? But... no it ain't gonna do well cos China is not doing that good...

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