How can we deny that PSC will NOT affect AAX profit at all, when it will affect the growth of company in terms of passengers carried, whether existing or potential new customers.

When there is limited growth, the management has to increase their promotional activities thus increasing expenses or lowering their fares thus reducing the revenue.

Still remember how MAS cut their fares to compete with AirAsia few years back? If both the airlines swap terminals and exchanged PSC especially international flights, the fares of both airlines will definitely will not remain status quo.

Having said the above, I do not mean to devalue AAX but its potential growth in the near future might be limited due to the less than favourable circumstance.

Anyhow, if AAX is to break even or profit from current quarter and make a full year profit and do not foresee to be back into the red again, it should worth around RM0.70 at least.

Cheers !

Do you realise that if they move to KLIA, AAX passengers have to increase payment of PSC from RM32 to RM70 instead of RM50? A whopping 150% increment ! When they say it is a level playing field, it is actually meant for AirAsia, the more obvious profit raking business.. As a consequence, AAX shall be the sacrificial lamb.

On the contrary, I don't expect major rebound or it might merely be thin trade as the general market sentiment is very low due to the imminent US presidential election

steven20, load factor increase of 3% alone is not significant but load factor increase of 3% coupled with underlying increase of capacity of 29% is a lot. This leads to increase of passengers carried of 35% (vs FY15Q3) and 18% (vs FY16Q2) respectively.

Would you prefer a plane with the load factor of 78% of 1,000,000 capacity OR a plane with a 99% load factor of 500,000 capacity?

It is worth thinking.

Hi steven20, yes, repayment of loan denominated in USD also plays a major role. Just that given constant repayment in both quarters with constant decrease in forex rate, the loss of forex in both quarters might not be far off from each other. So the profitability of this Q3 compared to Q2 might majorly affected by the increase in passengers carried and its higher average passenger fare.

Some companies might even minimise the forex loss by only repaying the minimal amount during unfavourable forex period while paying more during favourable times.

Morning derrtan, I do agree with you in relation to the performance of AAX in FY16Q3 in comparison to FY15Q4. Actually, I did not mean to negate sklyte's statement but I expect him to elaborate more or critically discuss the underlying reasons for his general statement of "Strong q4 la, q3 wont be that strong". That was why I only addressed him in my question. Among the discussion points I thought would be useful include:-
1. Average passenger fare - affects average margin per passenger
2. Passenger load factor - affects efficiency in utilisation of non-variable costs
3. Other income - affects overall profitability
4. Forex gain/loss - not easily determined as tickets are sold in various currencies

Having said that, I think that FY16Q3 might not be as good as FY15Q4 but it could be better than FY16Q2 due to:-
1. Seat capacity increase - 1.56m vs 1.37m --> increase of 14%
2. Passenger load factor increase - 78% vs 75% --> increase of 3% (higher load factor in addition to seat capacity increase plays a huge impact in sharing of non-variable costs, thus increasing margin per passenger)
3. Average passenger fare - FY16Q3 is unlikely lower than RM526 in FY16Q2 given that demand is greater in the former (demand was also proven greater in FY15Q3 vs FY15Q2 although not by much due to route rationalisation)
4. Forex gain/loss - 3.87 (FY16Q1) --> 3.99 (FY16Q2) --> 4.13 (FY16Q3) --> 3.5% decrease vs 3.1% decrease --> minimal difference

What say you, derrtan ?

sklyte, I would like to put forward to you the following question:-

In FY15Q4, total passengers carried were 0.99m but in FY16Q3, total passengers carried were 1.22m (highest in history of AAX thus far) --> increase of 23%

In FY15Q4, average exchange rate RM/USD was 4.2858 (FY15Q3 --> 4.0528) but in FY16Q3 was just about 4.15 (FY16Q2 --> 4.0092) --> decrease of 3%

In FY15Q4, profit after tax was RM202m & forex gain was RM57m, FY16Q3 --> yet to be known

Therefore, on what basis that you mentioned that "Strong q4 la, q3 wont be that strong" ?
Mind to explain ? Thanks !

pooter: result will be out on 22 nov
yifie_911: do you know why are you holding aax? do you have a target price for it?

Is there any last minute buying? I only saw last minute selling ! hahaha ! If no fly to 80 sen, then I salute you kaw kaw ^^

It's actually a sell at 4.50pm @ 5.2m.. If someone eat up all the 3.7m @ 0.435, then I will call it an achievement.. Otherwise, see how ya..

Given the passengers carried, if aax manage to achieve 1 sen eps for Q3, total eps is 12.2 sen, giving it a valuation of 85.4 sen at pe ratio of 7

Given the profit of RM13m really materialises this Q3, the EPS should be about 0.3 sen and 4Q rolling EPS should be 10.50 sen.. Given PE ratio of 7, AAX value is about RM0.735, about 71% increase from today's closing share price.

One of the excuse for AAX not hitting the estimated value after Q3 if they make the above profit is because it has not achieved a full year profit.. means someone is still doubting and delaying the rise till Q4..

If AAX still fail to hit the estimated price after Q4, then you all have to seriously revisit the fundamentals of the business..

char1234, even if this quarter is merely break even, 4 quarter rolling eps is already 10.20 sen. Given conservative PE ratio of 7, aax should be valued at 71.40 sen.. u can do your own calculation

char1234, you can't just compare the performance of this quarter against the previous one as airline industry is a seasonal business. It won't be meaningful but i believe most of the people do.

But if no one buys from him, then he can only continue to push up the price in order for him to exit, a more riskier strategy i suppose.. As more contra players will come in to have a piece of his cake..

When poorkid asked u all to buy, u all better don't.. He said he bought at 0.445 but the volume done was merely 1.3m.. doesn't make any sense.. Well, if u all buy then he will push the price down and all the trapped souls will resell to him in panic.. But someone has got to make the sacrifice in order for the greater cause.. so please do sell to him..

Something is boiling right now.. Watch out for show soon

"Correspondingly from the increase in the total fleet size and depreciation of the Malaysian Ringgit during the comparative periods, Maintenance and Overhaul expenses increased by 39.6% from RM121.6 million in 2Q2015 to RM169.9 million in 2Q2016."

An extract from Note 34 as above explains the reason for the consistently higher maintenance charges for the last 3 quarters or so

Jjchan, what u think of the WA? Will it continue to lag behind AAX mother in term of percentage increase in the short term or even long term if compared to AAX price of 0.405 and WA 0.285 before surge up yesterday

In my opinion, the price for the next few days will only float around.. Maybe another tsunami next week to flush out small players before release of result next wed for their final collection.. After positive result is made known to public, then only it will start full throttle to breach previous high of 0.415

Hey guys, I am back after hibernating for so long.. MrPouper must be enjoying himself for the past few months here..hahaha.. By the way JJchan, the release of AAX result is on Tuesday, 23 August

From light comes darkness.. And from darkness comes light

I smell catastrophe tomorrow.. Hope my instinct is not right.. Anyhow, it won't affect me much too.. Just buy on bargain..

People say a picture paint a thousand words.. But I say a word paint a thousand meanings.. The word "soon" could be tomorrow, the day after tomorrow, next week, next month, next year or 10 years later..

I say it will soon turn into 2 cents.. Just my 2 cents anyway..

When ikan bilis switch to AA and chase high, the BB will trap all the ikan bilis to support AA price while they swap to AAX to push.. With their available funds especially after earning so much from AA bull run, they can easily limit up AAX within a single day. So ikan bilis who are greedy and try to get the best of both worlds are the losers

Why do you think the price keep moving between 0.050 and 0.055 ? Because it is merely a tiger show. Don't buy unless it breaks 0.06 comfortably. Because the price can move in either direction. 0.05 is not the bottom price

hahaha, another daily tiger show

If we get hit once, we are ignorant..
If we get hit twice, we are idiots..

Someone is holding the supporting line very tightly.. When the support falls, all hell will break loose.. Downward trend looks imminent in the coming month

Wow, warrant so heavy.. so many contra players.. can move??

JJchan, buying small lots for warrant ok la, don't play till get margin call.. haha.. Cause it seems that a downward trend is imminent like last quarter to force off players.. do u agree with this?

traderman: It is just that the warrants are free from certain restrictions and detachable from underlying asset. Not really free as in no money is involved to buy the warrants. Datuk Kamaruddin acquired 1,641,800 warrants in the open market at 0.29 each. Just that may be the amount is not material to him. But seems like he is very bullish about AAX prospect, even more than Tony. And he showed it through his own action. Salute him !

It will take at least a month or two, because the recently released quarter result not so encouraging

Yes, it is good to move. But I'm still not convinced by the warrant movement which is not as bullish as before the release of quarter result.. haha.. no choice, have to wait and see

Yes, I understand that the warrant will fall much lower than the mother on a downward trend.. Just that I worry in upward trend, warrant will move much slower than mother since it is overvalued like u guys mentioned.. anyway, yeah, better buy mother share to be safe.. better be safe than sorry

Jjchan, if aax is pushed up, will warrant be pushed up even more than mother?

As I mentioned earlier, Tiger is hungry for cash ! All it wants to do is get cash, cash and cash from the public and who knows suddenly one day....

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5113745

Yes JJChan, do u have any idea whether this 2nd phase of 0.40 - 0.80 will only be completed after release of 1QFY17 or by December 2016? Will appreciate if you can provide us some enlightenment

Short term yield investors might not be too favorable lately but longer term holders will almost be assured of the profits to be reaped as the potential is unleashed gradually. As the saying goes, Rome was not built in a day

The recently released quarter result of AAX might not look as great as AA but it was definitely promising.

AAX is gradually switching their A330s to re-engined variant

This could also be one of the reasons for the high maintenance charges:-

https://www.flightglobal.com/news/articles/gmf-to-conduct-heavy-checks-on-three-airasia-x-a330s-422783/

http://www.gmf-aeroasia.co.id/2016/02/20/malaysia-airasia-x-hand-over-its-airbus-a330-maintenance-to-gmf/

A daring assumption here, TF wants to maintain AAX as the most undervalued airline in the world !

TF will let AAX to fly to RM1, slowly but surely, but not before AA reach RM4 - 5.

When AA reach bluechip status at RM7 - 8, AAX shall take over the current AA status.

Losses are small but accumulative.. Reserves look clean due to par value reduction from RM0.20 to RM0.08.. In the next 4 months, the Company is liable to pay RM1.14 million for unlawful purchase of land.. There goes the proceeds from the rights issues recently.. The Company is seriously in need of cash..

Having said the above, still, syndicates need no reason to fry up a stock price.. It's just a matter whether the public buy into it

Guys, Datuk Kamarudin send us another signal through his huge warrant acquisition.. Another upward surge next monday?

http://www.bursamalaysia.com/market/listed-companies/company-announcements/5107469

From my observation for the past few months, AAX are of interest to 4 group of people:-
(i) SME retailers a.k.a. ikan bilis
(ii) contra players
(iii) BB
(iv) FF

Normally if only contra players are involved, they will only dare to push the price up to a certain limit. They are good at providing liquidity and usually buy on rumours. If BB is not involved, the pushed up price won't last more than a few days.

In order to involve the BB, the general rule is that they must accumulate enough by pressuring the SME retailers to sell to them with the help of tumbling prices when contra players leave the market. BB will push up the price and let them stay up, slowly but surely (perhaps directive from SOMEONE?)

FF will come in if really AAX is doing tremendously and able to attract their attention.

Just my own observation, might be right, might be wrong.

In my opinion, if only AAX-WA is moving up substantially and not AAX, these are only push up by contra players and the price will not stay high for long, merely a few days.. Only BB can push AAX high enough but at the moment, they have not accumulate enough.. Retailers have not sold enough to the BB

Calvin Tan, seriously, do you know how is capital commitment defined in the context of financial reporting as found in financial statements ?

Oh, my MrPouper is back ! Hahaha !

You are most welcome, francishuat !

At times when we are in the middle of a battle, there will be a lot of noises that distract our mind.

Just keep focus and take some time to rethink / revisit the initial reason that keep us into this counter.

AAX has been very well managed by Benyamin since he took over in 2015 and what he does best is by focusing on growth in yield and revenue (by expanding AAX's flight network internationally in a rational manner) rather than cost cutting measurement (which might have a floor limit).

You guys can witness exactly what he is doing at AAX at the moment.

When the going gets tough, the tough gets going !