Just wanted to share and discussed AirAsia valuation. Seems that AirAsia has reached a resistance level of RM2.70 from its high of RM3.05 in the matter of week. That is around a 10% drop.

Base on the Q4 2010 report, some good and bad data is derived

The Bad
- Load factor for other region aside from Malaysia, Thailand and Indonesia missed a full year estimate by 5%
- Rising jet fuel price

The Good
- Double digit growth in Malaysia and Thailand and single digit growth in Indonesia (presumably due to volcanic ash)
- Possible dual-listing in more establish money market HK or US, due to attractiveness of AirAsia to foreign funds
- Expected strong fourth quarter’s results to be announced next month

On for discussion, read that AirAsia has hedged 11 per cent of this year’s first quarter jet fuel requirements at circa US$100. Subsequently, AirAsia will likely re-instate fuel surcharges should jet fuel price breach the US$120-US$130. What does this mean?

Just my observation of the past few days. Seems like the resistance price is at RM2.70. Was checking out the buy/sell queue today, especially the last 20 minutes where the price drop to RM2.68 before retracting back to RM2.70. Quite a lot of people picking up the stock now waiting for the rise

AirAsia Bhd. (AIRA MK), Southeast Asia’s biggest budget carrier, rose 4.8 percent to 2.83 ringgit, the largest gain since Jan. 13. The Employees Provident Fund, the country’s biggest pension fund, bought 5 million shares in AirAsia, an exchange filing showed.

[Dow Jones] STOCK CALL: UOBKayHian lowers AirAsia's (5099.KU) target a tad to MYR3.63 from MYR3.66 after adjusting for the listing value of AirAsia's Thai and Indonesian associates, as well as its 16% stake in AirAsiaX. "We met up with Benjamin Ismail, investor relations head at AirAsia, and came away impressed with the company's long-term potential[I]," says UOB; the house says while a fuel price increase is a concern, it's confident in AirAsia's ability to raise ticket prices. "For 2011, we have assumed that base ticket prices will grow by 5.0% or MYR8.70, which we believe won't impact demand," UOB says. The house raises AirAsia's 2010 net profit estimate by 1.1% to MYR958 million after factoring in 4Q10 operating statistics, but lowers its 2011 earnings estimate by 5.0% to MYR928 million after increasing its average fuel price estimate by 5.0% to US$105/barrel. UOB keeps a Buy call on AirAsia[COLOR=red]. The stock is up 1.1% at MYR2.82.

0640 GMT [Dow Jones] STOCK CALL: Maybank IB Research keeps AirAsia (5099.KU) at Buy with an unchanged MYR3.36 target after the low-cost carrier says it plans to defer 10 A320 aircraft deliveries to 2015 from 2012 originally. Despite the deferral, the airline will still take delivery of 14 planes in 2012. The house says the deferral is "no surprise" as AirAsia had earlier hinted at the possibility, and is likely positive on the bottom line especially in light of new local competition from Firefly, the low-cost unit of Malaysian Airline System (3786.KU). "The risk of capacity oversupply is real and cannot be taken lightly...the slower pace of capacity growth should enable the company to attain higher yields and load factors," says Maybank, adding that the deferral has no impact on its forecasts as it had been largely expected. The stock is up 0.4% at MYR2.70


Quite a bit of writeup/analyst from several houses. Anything cooking? Any info on Q4Y2010 result?