KUALA LUMPUR: PublicInvest Research maintained its forecast on AirAsia Group Bhd following its announcement to enter into a share price agreement with Expedia Southeast Asia Pte Ltd and Expedia Inc to dispose of its entire 25% stake in AAE Travel Pte Ltd.
AAE Travel is a joint venture with Expedia and will be disposed for US$60mil cash, which will in turn be used for AirAsia group's working capital.
Accordingly, the group will recognise a gain on disposal of RM181.6mil at consolidated level in 3Q18.
"We are positive on the monetisation of non-core business. Based on our estimate, the transaction was done at 13x historical PER, lower than its earlier divestment (in 2015) of 20x historical PER," said PublicInvest.
The research house maintained its outperform call on AirAsia with a target price of RM5.03 as it expects higher jet fuel price to be partially offset by improvement in yield and higher dividend payout from the divestment of its aircraft leasing business.
"To date, it has transferred 39 aircraft, for which the group has received gross proceeds of USD501.6m (c.RM2bn). It is currently on schedule to complete the planned staggered disposals of the remaining 45 aircraft and 14 aircraft engines under the Incline B SPA and FLY SPA," said PublicInvest in its Wednesday report update.
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