Saturday, January 4, 2014

AirAsia X - Unrivalled Growth Prospects (MKE)

AirAsia X
Current price (MYR): 0.995
Target price (MYR):1.30
Unrivalled Growth Prospects

Smooth sailing. AirAsia X’s 9M13 core net profit of MYR35.4m, from a core loss of MYR30.0m in 9M12, was slightly better than our expectations. Management is doing a good job in filling up the aircraft, maintaining decent yields and keeping unit cost under control. It has also successfully shielded itself from the fare war that is plaguing the domestic sector.

Distinctively cyclical. The market struggles to be comfortable with AAX’s cyclicality whereby it is profitable only in 4Q and 1Q, the lean quarters of 2Q and 3Q struggles to be profit making. Thus far, the Company has released its 2Q-3Q results which are slightly ahead of our expectation; however the share price has languised due to negative sentiments and misunderstanding surrounding the Company’s financial performance.

On track to meet our earnings forecasts. 4Q is a seasonally strong period and the current market demand outlook is healthy based on its forward booking trends. The take-up rates for new routes (Busan and Maldives) are largely within management’s expectations. Fuel price has been on a declining trend since Oct 2013, which is the case for CASK excluding fuel as well, for the Company has been benefiting from economies of scale. AirAsia X is on track towards delivering 2013 financial results that level up with our and consensus expectations.

2014 will be driven by maturing routes. AAX will benefit from route maturity since it has been launching many new routes and frequency addition in 2012-13. Most of the new routes have stabilized and the management’s focus is to push for higher yields. This, coupled with diligent cost control will underpin strong profit growth.

Maintain BUY. Overall, AirAsia X’s performance in 2013 YTD has been smooth and consistent with the statements made by the management during its IPO roadshow. We are positive on the developments of the Company as well as the insatiable demand for long haul budget travel. We keep our earnings forecast and target price of MYR1.30/share unchanged.

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

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