Sunday, October 6, 2013

AirAsia : Keener competition at home (DBSV)

KLCI : 1,769.03
Price Target : 12-month RM 2.90
Keener competition at home

• Strong passenger growth in Indonesia
• Competition driving yields lower
• Maintain HOLD rating and RM2.90 TP

Indonesian growth. AirAsia Indonesia‘s revenue grew 42% y-o-y to IDR1,398.2b in 2Q13 on the back of 33% passenger growth.
This is attributed to a change in distribution strategy, as it created 3,500 new distribution channels. Capacity will grow with seven new aircraft to be delivered this year and more orders earmarked for Indonesian routes. However, competition is strong as Lion Air and Garuda defend their home turf with large capacity additions. Any growth will also be capped by the airport infrastructure in Indonesia which is already running at overcapacity. Profits from the Indonesian venture will only be recognized when a total of RM155m of unrecognized losses have been removed.

Competition heats up. Malindo has been disrupting the duopoly in domestic flights by offering aggressive prices with more legroom, in-flight entertainment and free baggage allowance. It has been targeting in demand domestic routes such as KL-KK and KL-Kuching and is about to go head-to-head with AirAsia with flights to India in 2H13. The increased competition will likely pressure yields; this could be more apparent in 2H13 as Malindo takes delivery of more aircraft.

Maintain HOLD. We trimmed FY13F earnings by 9% following weak 2Q13 results. Near term outlook remains challenging with rising competition and declining yields. Our RM2.90 TP is pegged to 9x FY14F EPS.

Source/Extract/Excerpts/来源/转贴/摘录: DBSV-Research,
Publish date: 03/10/13

No comments:

Post a Comment

Warren E. Buffett(沃伦•巴菲特)
Be fearful when others are greedy, and be greedy when others are fearful
别人贪婪时我恐惧, 别人恐惧时我贪婪
投资只需学好两门课: 一,是如何给企业估值,二,是如何看待股市波动
吉姆·罗杰斯(Jim Rogers)

乔治·索罗斯(George Soros)



高估期间, 卖对, 不卖也对, 买是错的。
低估期间, 买对, 不买也是对, 卖是错的。

Tan Teng Boo

There’s no such thing as defensive stocks.Every stock can be defensive depending on what price you pay for it and what value you get,
  • Selected Indexes 52 week range

  • Margin of Safety

    Investment Clock

    World's First Interactive Investment Clock