Asset disposal: Passengers wait to check in at AirAsia counters for their flights at Don Muang International Airport in Bangkok. Sources say AirAsia is looking to sell a majority stake in its leasing unit Asia Aviation Capital but is also open to a full sale.
KUALA LUMPUR: PublicInvest Research has maintained its “neutral” call on AirAsia X Bhd
(AAX) with a target price of 41.5 sen and expects a better financial results from the carrier.
“We expect the results to be slightly better than our estimates and on track for a turnaround.
“Nevertheless, we remain cautious on the impact of a stronger US dollar on its operating cost (i.e. aircraft maintenance and fuel costs), while capacity expansion is likely to slow down going forward,” PublicInvest said in a report.
The research house said AAX’s 4QFY16 operating statistics exceeded its expectations, with a strong double digit growth recorded in traffic volume (40.4%) and seats capacity (42.9%).
As a result, its passenger load in 4Q16 stood at 81.1%. Full-year FY16 average load was at 78.9%, an increase of 4.3 percentage points from the previous corresponding period.
AAX’s 4Q16 results and passenger yield data is expected to be released on Feb 22.
Meanwhile, PublicInvest also maintained its “neutral” call on AirAsia Bhd with an unchanged target price of RM2.50, pegging to 8 times multiple to the FY17F earnings.
“Our target price is based on enlarged share capital that includes the proposed share placement to Tune Live Sdn Bhd which is expected to complete by 1QFY17. At current share price, AirAsia is trading at 8 times FY17F earnings,” it added.
The research house said AirAsia’s 4QFY16 passenger load declined by 2.3 percentage points to 84.9%, after reported its strongest load of 87.2% in its recent 3Q.
For FY16, its average load stood at 85.8%, which is the strongest full year load recorded thus far. Its passenger volume in 4Q16 increased by 7.3% YoY to 14.5 million, while it seats capacity increased by 5.1% year-on-year.
PublicInvest said for AirAsia’s Malaysian operations, the operational numbers were within its expectation, with strong passengers’ load recorded at 87.4%.
Meanwhile, Thailand (TAA), Indonesia (IAA), Philippines (PAA) and India (AAI) reported load of more than 80% level.
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