AIRASIA Analysis:-
http://lcchong.wordpress.com/2014/02/27/ai...is-27-feb-2014/My View:-
- Market Timing
– EY%: Buy below 3.25, sell above 4.05
- I believe that while AIRASIA’s growth drivers will be still valid and solid, AIRASIA’s cost saving initiatives will help them to improve net profit in the future. The cost saving initiatives include:
(i) increasing the use of automation
(ii) reduce marketing spending
(iii) renegotiation of engineering contracts
(iv) route rationalisation
(v) closure of regional offices
(vi) disposing old aircraft in order to be more competitive in the market.
- Apart from cost saving initiatives, management will also strive to strike a balance by enhancing its revenue through its "Emirates Project" by introducing more connecting flights with AAX and other AOCS, growing its ancillary income per pax from RM41 to RM50 by introducing Wifi and Duty Free Shopping on plane.
- I believe that FY2014 would be a better year as compared to 2013, with the expectation that yield would recover and its cost savings initiatives would boost earnings.
- On the other hand, MAS and AIRASIA have guided that domestic and intra-ASEAN fares are unlikely to decline further from the already-low levels, but fares are unlikely to rise either, as capacity deployment over the next six months will be kept at present levels and there is no evidence of capacity rationalisation. As the weak 4Q13 fares carry over into 2014, some analysts expect MAA to experience an average 5% underlying yield compression in 2014, leading to a 26% core net profit decline. To make things worse, Thai AirAsia’s profit is likely to shrink and Indonesia AirAsia’s losses expand further this year. Thus, the analysts expect AirAsia’s group core net profit to fall a massive 43% yoy in 2014. The outlook may improve in 2015-16 as the losses are unsustainable for MAS and Malindo. I also conquer with their view.
- Based on Changes in Sub. S-hldr’s Int. (29B), since Jan 2014, EPF has been heavily buying AIRASIA, and Wellington also stopped net selling AIRASIA. Heavy buy by EPF doesn’t guarantee appreciation of AIRASIA’s stock price, but it provides a very strong support from 2.2 to 2.4.
- AirAsia has told Bursa Malaysia that it is proposing to buy up to 10% of its issued and paid-up share capital at any point in time. The proposed share buyback, if implemented, will enable AirAsia and its subsidiaries to utilise any of its surplus financial resources, which are not immediately required for other uses, to purchase its own shares from the market, the company said. The proposed share buyback is expected to stabilise the price of AirAsia shares and to prevent against speculation of the shares, when undervalued, to enhance investors’ confidence. (27 Feb 2014)
- I have accumulated AIRASIA 3 times in Dec 2013 and Jan 2014 in the range from 2.3 to 2.4, so I won’t accumulate AIRASIA in near term or until it formed a new higher support.
Latest Financial – Q4 2013 Financial Report (26 Feb 2014)
http://www.bursamalaysia.com/market/listed...cements/1550541At the time of writing, I owned shares of AIRASIA.
Impressive, but India is not in and still unsure, and whether MAS kamikaze tactic can knock a hole to sink AA or not still unknown. We all know MAS should be put into rest couple of times by now, but each time we foot the bill and bring it up, only found we are in the same situation a few years later, Malindo remain as blackbox as we have no idea how they are doing, but judging from the dog fight nowadays, they should not be doing so well
The whole situation become very messy now, the winner will emerge with wounds all over its body, IMHO.
But AA stand for higher chance to be winner, with another cash injection into MAS imminent
Nov 23 2012, 11:43 AM
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So Malindo is not no threat to MAS, but MAS is lucky to have a rich daddy who is willing to pay...
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