What's there to be angry about?

This is too common in stock forums. Some (ass) buys a stock. He blah, blah, blah over the forum(s). Some one else points out some possible risk factors.

hey!!!!!

This is tok bad wor.
This is noise! Bad market noise!
This is buat bomoh wor.
This is putting vodoo on my stock. Why you so black heart one. KNS!
This is buat bad feng shui wor.
This is call pissing on MY stock wor.
My stock wor. Why you so ass talk bad about my stock.

Then it becomes a pissing war.

Hate you! Hate you! Hate you!




All too common.



and for all that I have written...
the stock might post some improved earnings... LOL! (how you wanna blame me ah?)
then some wise research write more bad SSS.
improved the earnings estimate.
kasi naik tu Toilet Paper.
... and goreng up the stock some more.

Congratulations.



Doing great!



Oh yeah... and I still in the very early days....gotta say that there's potential for more upsides.

"Getting in the stock correctly solves most of the selling problems"....

If got Chef and got wok then got goreng lo...


why don't you ask urself why you should trade the stock? what's the compelling reason?

Like I said, you should want a compelling reason to trade a stock.

Think about it....

Which sounds more logical / best reason...


A. I am gonna trade FISH.CO because someone told me Chef Wong Tai Chow is going deep fry some fish.

B. I am gonna trade FISH.CO because this stock flashed up on my daily stock chart scan. Chart is beautiful, stock name is beautiful

C. I am gonna trade FISH.CO because lately I seen a drastic increase in their business driven by their fish product, AROMA. Judging by their earnings track record and also the stock chart, the stock looks compelling for a trade.

D. I am gonna trade FISH.CO because my Yee Ma called by Ku Cheah and I so happened to overheard this conversion.

E. I am gonna trade FISH.CO because I saw someone post on a forum.

look at Mclean trading today...
right now -13%...

If one had stubbornly stuck to TA only....
wasn't the chart seductive?

now compare to other people like me...
why and how come I have such a big advantage over those who sticks only with TA ?

for me...I would simply avoid such a stock.
no need to look deep deep....

yeah.... there will exist many incidents too...
when a stock FA is shitty but the stock still rocket up..
there's nothing much one can do....
but just learn to ignore such stocks....
cannot win everything one....

This post has been edited by Boon3: May 23 2017, 12:45 PM

.... and then to make things even simpler...

NOT ALL 'FA' stocks can be traded....

tell me.... you holding, buying or selling?

tbh .... I always, always, always avoid stocks with such a massive plunge ....

BUT.... your stock chart is distorted.

the previous day candle should not be viewed as a gap down since the stock went ex dividend.

so there's only one gap down and no twice.

two gap downs paints a much more scarier chart.

This would be my preferred chart. It accounts for the stock going ex dividend.

AA is not that easy a stock to understand. Therefor, it's not as straight forward as guessing whether the earnings is good or bad.

As it is, the 2 most important event in the most recent time, is the placement shares and sale of the leasing company. Now the main objective (which was clearly ignored by many) was the fact that this group of companies, needed funding BIG time. They are committed to buy a shit load of airplanes but as with their company initial business idealogy, ie debts is blardy damn good (ie we use other people's money to build up this company - yeah, which was what the company literally did in their early days - borrow, borrow and borrow). With commitment to take delivery of planes worth close to 80 Billion in the future (next 20 years iinm), and a company balance sheet of cash 1 billion versus 12 or 13 billion current debts, clearly it wasn't sustainable for the company to carry on. This was clearly the reason for me that the stock tanked to below 1 in recent times. Plain english, they were buying new planes at such a pace that their finances could not handle. Hence, 1st, the so-called billion dollar stunt. Some cunning speculators took the opportunity and declared that Tony was betting his underpants that the stock would fly. So if Tony is betting, why aren't you? They teased. But clearly, it was a clear bailout. AirAsia NO MONEY. They owners had to raise fund and pumped it into their own company. (Did we notice too that this placement of shares took many months to complete? Uncle Tony no money? Or Uncle Tony had trouble raising money?)

Now the 2nd one. Why sell and leaseback own assets? Isn't this NOT a strategy that financially troubled company use to lessen the burden on their cash flow? So AirAsia jumped into the bandwagon but then, it decided, it was NOT enough. Go BIG or go home. So they are now embarking on the unthinkable. Selling their leasing company.

Think about it for a moment. They are approaching companies asking them for money. In return they get a share of a company doing buying and leasing of their asset. Err... funky?

Now in a financial markets, they are wizards, naturally. How to pitch this idea to the market? How about suggesting that a portion of the leasing company sale would be used as a cash payback to their shareholders?

Think about it. They embark on this road, because of they are so damn cash tight. Now they want to skim a portion of money raised to lessen their cash flow burden to payback the shareholders? Huh?

But markets are easily seduced. Throw in a possible 1 billion pay back to share holders.... Oooh lala....

U think share will fly or not?

.... in the meanwhile... market has been waiting a long time for concrete news....




Oh... the earnings.

Complicated. Perhaps you want to digest the above first.

So the main driver of the stock is the sale of the leasing company. Right or wrong this is what the market is expecting.

So more or less, the Q results .... err... probably not as important for the time being.

Now for the earnings... some issues to remember.

1. OIL prices. Cheaper oil by right should be good for AA. However, the problem is, they hedged too early. Hence, their hedged oil prices is actually more than the current prices.

2. Currency. It's all about the USD. They have 2 hedges. One on the currency and one of the currency swap. (Please read the Q reports la)

Now it's now as straight forward and simple as this.

If if you take say YearX Q4 notes (better if you read the annual report), what you should do is, read the amount they hedged for the year. ie, ALL THEIR HEDGES.

NOW COMPARE IT VERSUS THE PREVIOUS YEAR. The amount is significantly more (the last I remember).

They are hedging MORE..... and they have been hedging ever since they started. And another interesting note is, these hedging results, is actually more significant than their actual operating profits.

Which is why you will see the forex gains/forex losses, oil hedges losses .... these sums run into millions. Once. I recalled, losses hit over 500 million.
And because these hedges results figures are so huge, you cannot discount it. You cannot say, oh because the forex losses were so many millions, this was why the company did not do good. This is because hedging is in their dna and it's certainly in Tony's dna.

Which is why, in my opinion (probably many would not agree) why AirAsia is trading at so low earnings multiples.

ok so far?


Like I said..... main driver for the stock is still the leasing company. A special payback dividend of maybe 80 sen or 90 sen or 1.00 can easily masks everything.



Take care.



ps: I believe in betting on easy trades.
Simple easy trade.
If it's complicated... I avoid. If lari ayam, so what.

I saw the news brief but did not read the report.

Best we see for ourselves than to rely on others.

Complicated... for AirAsia... need deeper accounting skills to fully understand everything but anyway... my few sens..

anyway... my flawed attempt to understand...


First the income statement...

comparison is usually made comparing the current quarter vs the same quarter the previous year

ok... forgot to highlight the drastic raise staff cost, the fuel expenses.. etc etc...



The rise in sales revenue... looks impressive but one needs to consider that starting for this quarter, AirAsia has consolidated some of its subsidiaries. See note 1. Hence the higher sales.

The staff costs.... errr ......

The aircraft fuel expenses....
ok... remember AirAsia has hedged its fuel positions much earlier. It chased its hedges all the way down. If you look at its fuel hedging contracts, AirAsia now holds some 86 million barrel of jet fuel....
Compare it to the quarterly report on May 2014. AirAsia then held 0.1 million barrel of fuel contracts.
( Why this is important? I have always argued that Tony has way too much gambling in his dna. See the reports many. many years ago. As the oil started to fall, Tony gambled big and he chased the prices down).
Today... the market prices is much cheaper than his arsenal of 86 million fuel contracts. Basically, Tony lost shit loads of money in his hedging bet (once again) BUT because AirAsia consumes a shit load of fuel, his hedging losses isn't as apparent.
Which is WHY despite historically low jet fuel prices, AirAsia still loses money and this also is my understanding why the so much higher jet fuel expenses in a low jet fuel market environment.

Item 11. This ONE is a ONE OFF item.

The consolidation exercise involved...

• PT Indonesia AirAsia
• AirAsia Inc. Group of companies
• Philippines AirAsia Inc.

According to note 11.

MFRS 3, Business Combinations requires revaluation of the previously held interest in the
equity accounted investment at its fair value on the acquisition-date, and recognise any gain or
loss derived from the deemed disposal in the Income Statement. Pursuant to the consolidation
of the investees as mentioned in Note 1 above, the Group recognised a gain from
remeasurement of previously held interest in these associates amounting to RM214.4 million.



Clearly a ONE OFF item.

And for valuation purposes, net profit for the quarter should be lesser by 214 million.

And for the same reasoning, one should minus of another 127 million derived from the negative goodwill on consolidation.

Also note the mark to market loss on derivatives totaling 63 million.

more notes...

Cash is now 2.5 billion (31/3/17) vs 1.7 billion(31/12/16).
First hand, it looks like cash increased a lot. (should be good news)
But then, this new figure includes the 1 Billion from Tony's privileged placement of shares '

Borrowings. Note 36.
Total borrowings stood at 10.2 billion (31/3/17) vs 10.5 billion (31/12/16)

Note 34, for AirAsia derivatives hedges. I would prefer the Annual report's figures. It's more detailed.

(and in the subject of annual reports. Do note the huge amount of RELATED PARTY TRANSACTIONS within the group. Pure investors do not like to see to many RPTS within a company. It's basically left hand selling to right hand)

Note 9. The revenue includes it's leasing revenue.
(well if one is banking on the sale of the leasing company than the figures should be of some interest, yes?)

Leasing revenue for the quarter is 234 million. For the quarter ending (31/12/16), the leasing amount is 322 million.
Lesser leasing revenue? Not sure what's happening cos AirAsia accounts is complicated after all.

Now if assuming this is correct, we are looking at a company with a lease revenue of 230-322 million per quarter.
Err...
what's the estimate value of the leasing company again?

Another thing....

This quarter forex gain is only 56 million.
The same quarter the previous fiscal year, forex gain was 651 million.

Should we say this is the main reason why profits were down so much?

My firm answer is NO.

the bulk of AirAsia's borrowings is in USD. With borrowings running into millions, forex gains and losses are huge and is a CONSTANT in every quarterly report of AirAsia since listing. Meaning to say, every quarter AirAsia will record either forex gain or forex loss. So why should we use the forex gain 651 million as an excuse?

Ok, let's try a simple google search. You type the word AIRASIA FOREX ... and the next word that appears from google's suggestive search is the word LOSS. !!

129,000 hits too.

TQ. But if you do notice, what I do is purely simple comparisons. That's about it.

Anyway, have to stress again, I am a trader, so perhaps my comments could be flawed.

Most common mistakes I've seen is people tend to do Q-Q comparisons.
Comparisons should be made Y-Y.

You have a company who sells toys to the US.
Now in the US, sales peak for the Christmas/holiday period.
So customers usually order in maybe Aug or earlier to make sure they get their holiday sales all prepared.

So this company exporting to US, it's surely gonna have seasonal characteristics. So if one to compare say Q1 to Q2... they would definitely get a massive distortion.

It's same with most of business locally.
There's always some sort of seasonal characteristics.
This is why people compare Y-Y.