BWC, is that your understanding on AAC and MAA? Lol...

Posted by BuyWithConviction > Mar 16, 2017 02:58 PM | Report Abuse

The planes are not free. The huge debt needs repayment. I am doubtful we are going to get a big special dividend anywhere near 1.00 even, got chance it could be a lot less even. I would not over-promote. Hehe

humbleisland, no point to do that. So far AA more profitable than AAX. And segregated them will protect TF and KM wealth better as well.

My hand gatal also, buy 5% more at 2.86.
65% Airasia
6% C-38 AA
29% Cash

cruger12345, To be more conservative, I assume the growth in revenue with offset by competitive pressure in the market. And all the while AA is quote to be lowest cost /ASK in the world. So cost is the major thing to monitor on AA.

BWC, I still waiting your understanding on the arrangement of AAC and MAA. Hope to learn something.

One more thing to share. But not sure I'm correct or not.
I would like to hold 25% of my portfolio for AA in long term. So I may concern about AA net operating profit in future after selling the AAC. Operation cost will increase since AA need to lease more fleets from AAC in future. At the same the financial cost will reduce since debt is reducing. But I believe net impact is still higher in operation cost. But I suspect that this impact may offset by fuel saving (15% saving) from taking more NEOS instead of CEOS in future. CEOS from AAC will more to others associate so that to keep maximum profit for main profit generator for AA, MAA!!!

BuyWithConviction, What is your understanding on AAC and MAA? Wash my ear and prepare to listen it. Hahahaha...

cruger12345, sorry my fault. Too over estimate myself to understand the big picture. Better stick with my number, easier to understand.

BuyWithConviction, maybe you dont really read the balance sheet changes between MAA and AAC recently. Or you dont know how to read? hahahahaa.....

Hope I'm right. Huat ar, to all shareholders of AA

I think my best guessing is 1.1B-1.2B for 70%-80% of AAC!!!

Suddenly think that 1.8B USD for AAC is POSSIBLE!!!!

My valuation on AAC:
Before transfer 38 fleets for SLB and 7 fleets direct transfer from MAA. TF quote that someone offer them 1B USD for AAC at that time with 63 fleets with profit close to 57M USD dollar per annual. Base on CIMB analysis, AAC can generate 87M USD dollar per annual with total 108 fleets by end of 2017.

Previous Valuation on AAC:
Existing Book = 57M x PE 10 = 570M
Future Book = Orderbook of 133 Planes x 4M USD (Saving due to large discount + receive aircraft faster) = 532M USD
Total = 570M + 532M= 1.10B

Current Valuation on AAC:
Existing Book = 108M x PE 10 = 1.08B
Future Book = Orderbook of 133 Planes x 5M USD (4M maybe too conservative since market hungry for aircraft now) = 665M
Total = 1.08M + 0.665M= 1.745B which is close to 1.8B USD!!!!

Can you consistent a bit? Will the big business like AA keep changing their fundamental profile so quick? Now worth to buy? later not worth? Lol.. Talk = no talk.

but please transfer all of your AA profit to my bank account 1st.. haha..

Delete my non-polite word. Afraid karma on my AA later. lol.. World Peace!
8 Business Days to go. 27 March 2017. Raise your bet on AAC Price (assume 100% dispose):
1. 1.1B - 1.2B USD - 1:1.3
2. 1.0B - 1.1B USD - 1:1.5
3. 1.2B - 1.4B USD - 1:2.0
4. Above 1.4B USD - 1:3.0
5. Below 1.0B USD - 1:5.0

supermx2, good luck to you. Try not to blame anyone (manipulating la, cheating la, etc) if the price drop lower than 2.80 and maybe 2.70. We only can blame ourselves if we cannot earn money from any share. YOU are the one who make the decision to buy/sell. Not those so call manipulator.

BuyWithConviction, can you explain further how to trap? Buy or Sell? Call Warrant or Put Warrant or Mother Share? What price? Trap what leh?

AmateurPlayer, we all know that you are trying to tell us Airasia should value same as Genting. Although I think they are not related at all, but it is ok since this is your method to do the valuation for AA. But can you please stop spamming by copy and paste over and over again?

She'll house, they have the Call warrant at same ratio, exercise price and expired date. They just want to earn the spread

Maybank just issue put-warrant HC, for those who expect AA will drop recently may study about it.

I change my q from 2.78 to 2.83. Also can't get

haha.. just wild guess. TF should do better than us on this. Lol..

1% for 2018 is about 3 weeks ago. 3 weeks / 1 year = 5.8%. Hedging should be something daily operation for AA to smooth the operation profit. So current position should be 7%

valuegrowth, where the 15% hedging number come from?

BWC, congrat to you. Now you start to aware that how funny you are to use a vague comment as "your personal track" record. Well done. Our donation (funded by valuegrowth) for your medical check up seem not wasted.

By the way, I wish I know Icon8888 but I'm not. But if you say that I'm fan of him then it's a yes. I learn a lot and get useful info from his blog. Not only "Big Picture" and "No ?? ball". lol..

BWC & Investo

Nah, my history of comment. Cincai guess only. Should be slightly more useful compare to your big picture comment. hahaha....

Posted by batu88 > Feb 2, 2017 11:37 AM | Report Abuse
I believe that EPF will keep buying to keep him as a substantial shareholder. March is coming and binding offer will announce soon. I wont be surprise if the AAC price reach up to 1.2B USD. Check the chinese tourism number during CNY, then u will know why china companies so desperate to get more aircraft asap.

waihung82, FOMC meeting is every quarter la. You worried about this quarter, next quarter will worried again. Very tiring. As long as fundamental of AA still can make money in high USD environment, then not much to worry liao. Too many thing to worry if think too much. Oil price drop afraid ringgit weak, oil price up afraid operation cost increase, maybe AA is poor then only sell AAC, there are many many maybe.... and Maybe tomorrow AA stay at 3.10! hahaha...

I dont know how the currency work actually. What I know is something related to supply and demand. If AAC buyer pay in USD, but AA exchange all the USD in RM so that AA can distribute it as dividend, will this make Ringgit stronger since suddenly you exchange so many money in ringgit? Maybe impact is too small la compare to whole market. Lol.. Just suddenly think of this. Ignore me if it does not make any sense.

2ez4airasia, if no special dividend is distributed, the AA should tell the different story liao. My script is as below:
1. TF and KM are super rich. They no need this special dividend for their 1B Ringgit PP. Lol.. Not really related to us la actually.
2. AA share price may drop significantly. Expectation on dividend is too high now. If not distribute sure the price drop like hell. But the hell I refer is about RM2.2 level only.
3. Almost 0 in gearing ratio, mean no finance cost for AA. Refer to year 2016, you may save up to 500M ringgit. Net of 300M operating earning from AAC. You still have surplus 200M!!!
Action point:
Sailang again at price RM2.20. So far I cannot find 0 gearing in airline business. Lol.. Mean all asset = NTA = should be around 3.5 per share that time.

In term of business, it's superb. Just not good for share price.
Anyway, 99.99% not going to happen. No chance to collect again at RM2.20 anymore. Hahaha...

EPF finally catch up the dilution impact from PP at the end. Lol... Well done EPF!!! please push higher before expired of C-38!!

If 3.20 within few more weeks, my c-38 is double!! haha.. contribute 6% return in my portfolio. Then my target 30% for 2017 is reach liao that time.

Last time I got try to reconciliation investo average price in AA. For example: average 2.56 with 70% portfolio. then suddenly become 2.43 with 100% portfolio. Then investo need to buy in 30% with price 2.13. Unless investo increase the capital. If not, mathematically not doable. Lol.. Try to learn some simple mathematics before learn to cheat. Hahaha.. Not much thing to study in AA now, just try to practise some simple mathematics.

1 lot mean RM2910, so rich ar? Can donate to me? lol...

好心有好报

Below open for donation for BwC's medical check up:
1. valuegrowth - 10sen
2. Batu88 - 25sen

yeah, finally match all my C-38 at 0.085. Average price 0.0764.

Cannot bluff? From history of comment? hahahaha...
Nah, I bluff you right now. I bought AA at 0.80 two years ago.. Lol...

wiki123, my C-34 is 0.2439 but not 0.2435 as mentioned by you.
Although not much different, but you can check with your banker on this.
I won't add AA at this moment. Just let the profit run. Will sell 20% of my AA (12% in total portfolio) at price RM3.20. Confident with AA but just try to realize some profit. Will try to diversified my portfolio in future.
Current portfolio:
60% AA
5% C-38
35% Cash

Any high potential stock for me to study beside AA? Thanks in advance.

yes, partially match C38 at 0.085. Please sell more to me. Lol..

Guys, just received my money for C-34. Miss my chance to buy below 2.80 for AA. Not sure I should happy or not. Lol..

Sentence without "crystal'sound better clarification.

valuegrowth, agreed with you. All of these is just the preparation from TF to boost MAX valuation in HKSE. We just the enjoy the show from TF will do. Lol..

Springtime, i can guarantee 100% that AAC sure will go through. Why I say so?
TF will make sure it will go through with 2 main reasons:
1. No one will believe what TF say to investor in future if this deal is not done. There is nothing more important than CREDIBILITY in business world. So TF wont risk himself on this.
2. TF and KM need special dividend more than we do. They need money to pay off their loan from PP.

Q1 result will be quite important to me as well. Almost all analysis say that AA will face challenge in more competitive market and may not perform as good as 2016 but i personally don't think so. If operating profit for AA in Q1 2017 > Q1 2016, then in coming Q not to worried too much liao..It also show that my guessing is more accurate than those analysis from investment banks. Lol.. Please also take note that there is additional income by collecting branding license fees from associate (all the while only collect from Thai, now they collect from Indo and philippines as well). PAT in Q1 17 should be superb since they can write off unrealistic gain when they transfer their aircraft from MAA to AAC (7 fleets will direct transfer and 28 fleets will be in SLB). Asset value will reflect in new currency rate. Let say we assume that these 35 fleets (assume 20M each which is quite conservative) worth 35x20M USD = 700M USD. Previous asset booked = 700M x3.23= 2.26B. But you can book 700M x 4.45 = 3.11B. Write off 870M unrealised loss and this will reflect into PAT. Not sure how soon AA will reflected this. But i guess it will fully reflected in Q2 2017. So 870M /2 = 435 forex gain / other revenue in coming two Q.

Got Many sifus here mentioned that we should focus more on it's operating profit instead off PAT which will distort by this kind forex gain/loss. For those who like to refer PAT as major metric, you will happy to see Q1 and Q2 result very soon.

Extra 0.6B USD = RM0.80 per share!!! if that time AA still with price below 3. I will sell anything I have and dump into AA!!!

I'm happy if it's true but I don't think it will reach that high.
CIMB, MIDF and HL give the same target price 1.0B-1.2B just after meet with AA CFO. I think that they have better sense on AAC price compare to others.
USD 1.0B is ok but not good enough: Target price RM3.20
USD 1.1B is good: Target price RM3.35
USD 1.2B is superb!! Target price RM3.60
Anything above is crazy!!!
USD 0.1B= RM0.13 per share in cash!!!

Yes, I will q more at 2.78 by Monday.

Thanks valuegrowth. Can I summaries like this way:
1. AA will earn higher margin with loan payment 3.23 MY:1.00 USD for own fleets and at the same time earn the asset in USD.
2. But lower margin from leasing units since you need pay leasing fees base on current currency rate.
3. Show significant amount in forex gain (not in cash) due to write off most of the unrealised lose.

Am i right?

Thanks for valuegrowth and feich for sharing. Sorry if I trouble you two too much. I'm still new in stocks and still got many things to learn from you all. REally appreciate it.

Thanks feicsh. We all know that AA is undervalue with their current fundamental /valuation. But these have not been clearly show in P&L and balance sheet.

Thus, I'm trying to guess what TF going to do with AA balance sheet and how to reflect these gain into P&L in coming 17Q1. Should have big action to Q1 to boost up their MAX valuation on AA since they are going to listed in HK. Currently what we know are:
1. Transfer 7 aircraft to AAC - will write off those unrealised gain and will see the significant forex gain by next Q report. Just like Q4 16 report, suppose to have 300M forex loss, but fully offset by 29 aircraft in AAC by booking their asset in USD. As simple as 1 click only. Lol..
2. SLB 28 Aircraft to AAC - Same as above.
3. Gearing may drop below 0.8 after these actions.

Before this, i guess AA will sell 100% of AAC and distribute 70% money receive from AA as special dividend + balance 30% to clear new debt (8 new aircraft for MAA this year). But now I guess it differently. AA might only sell 80% of AAC with around 1B USD and 100% distribute as dividend (RM1.30 per share), this is quite close with CIMB analysis. New debt can be 100% offset by disposal of old aircraft to AAC and those unrealised loss is gone as mentioned by valuegrowth.

Now TF action is better than what I can imagine before. No wonder he is the one become AA CEO but no me.. Hahahahaha... Everything is smooth and we just wait AA fly to the peak very very soon. Now I can guaranteed PAT in Q1 is at least +600M.
Yes, f**king to unrealised loss. Hahaha

feicsh/valuegrowth,
Let say the loan amount =10B ringgit (70% hedged at 3.2 ringgit : 1 USD, 30% unhedged). Worth 7B /3.2 + 3B /4.45 = 2.86B
MAA owned 70 aircraft, AAC owned 30 aircraft
Assume your asset value = loan amount is USD = 2.86B USD = 2.86x 4.45 =12.7B ringgit
Now MAA sell all aircraft to AAC
MAA owned 0 aircraft, AAC owned 100 aircraft

MAA balance sheet before selling
Asset=10B
Liability=10B
Equity=0

MAA balance sheet after selling (sell with 12.7B)
Asset=0
Liability=0
Equity= 2.7B

Am I correct under this scenario? Please correct me if i'm wrong. Appreciate it.