Saturday, January 4, 2014

AirAsia -Cheap Relative to Peers (MKE)

AirAsia
Current price (MYR): 2.20
Target price (MYR): 2.80
Cheap Relative to Peers

Over punished, stock offers value. AirAsia’s 9M13 core net profit was down by 15.5% YoY due to the intensifying competition across the board. The share price has fallen 19.7% in 2013. We think this is overdone and the stock is in deep value compared to global peers based on PER and adjusted EV/EBITDAR metrics.


Malindo has changed the equilibrium. Malindo’s entry has structurally raised the competition whereby yields and profit margins will be lower than pre-2012 levels. MAS and AirAsia have over reacted with cut throat fares. The industry will learn to accept that Malindo is here to stay, and will then focus on their core markets and compete rationally going forward.

AirAsia is deploying modest capacity in 2014. It plans to deploy four aircraft in 2014 (constant to 2013), which translates to capacity growth of 6%-7%. This is modest by AirAsia’s standards and this is a protective measure to balance out the supply-demand and provide platform for yield growth. We are positive on this strategy.

2014 will be supported by associates. We think that the Malaysian operations will recover and generate 9.2% profit growth YoY. The operations in Thailand and Indonesia should do much better due to expectations of higher yields and improving operating cost. Other associates such as AirAsia-Expedia, AirAsia-CAE have reached scalability and churning strong profits.

Foreign foray will continue to be loss making. AirAsia’s foray in Philippines and India, will continue to be loss making in 2014. It has yet to reach critical size and will continue to incur start-up losses. We think it will take another 2-3 years – at least, for the new startups to start contributing to the Group. We are undeterred with the start-up losses, given that the long-term benefits significantly outweigh the risks.

Maintain BUY. We keep our earnings forecasts and target price of MYR2.80/share unchanged. AirAsia is expected to deliver respectable earnings growth of 14.9% in 2014 and 5.9% in 2015 respectively. The markets will soon take notice of this and re-rate the stock accordingly




Source/Extract/Excerpts/来源/转贴/摘录: MKE-Research,
Publish date: 02/01/14

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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)
“错过时机”胜于“搞错对象”:不会全军覆没!”
做自己熟悉的事,等到发现大好机会才投钱下去

乔治·索罗斯(George Soros)

“犯错误并没有什么好羞耻的,只有知错不改才是耻辱。”

如果操作过量,即使对市场判断正确,仍会一败涂地。

李驰(中国巴菲特)
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,
冷眼(冯时能)投资概念
“买股票就是买公司的股份,买股份就是与陌生人合股做生意”。
合股做生意,则公司股份的业绩高于一切,而股票的价值决定于盈利。
价值是本,价格是末,故公司比股市重要百倍。
曹仁超-香港股神/港股明灯
1.有智慧,不如趁势
2.止损不止盈
成功者所以成功,是因为不怕失败!失败者所以失败,是失败后不再尝试!
曾淵滄-散户明灯
每逢灾难就是机会,而是在灾难发生时贱价买股票,然后放在一边,耐性地等灾难结束
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