PETALING JAYA: The increase in air-travel demand is set to boost the profits of Capital A Bhd
’s AirAsia Move and Santan businesses in the financial year of 2026 (FY26).
TA Research also said that the expansion of Asia Digital Engineering’s (ADE) hangar by adding four new maintenance lines would fuel FY26’s earnings.
ADE is a subsidiary of Capital A, which provides comprehensive maintenance, repair and overhaul services.
“Meanwhile, contribution from Teleport is expected to rise on the back of robust eCommerce demand,” TA Research said in a note.
The research house pointed out that Capital A’s management has set new internal targets for FY26.
These include a revenue target of RM3bil, an earnings before interest, taxes, depreciation and amortisation of RM600mil and RM266mil in net operating profit post-airline disposal.
“Additionally, these figures are different from our forecasts due to omissions of holding company cost and intercompany transactions.
“On the cost front, management expects a significant reduction in finance cost as it strives to refinance those existing debts charging higher interest rates,” stated TA Research, which has a “hold” call on the Capital A stock.
In a separate note, Maybank Investment Bank Research (Maybank IB) said Capital A’s recently announced earnings for the fourth quarter of FY25 (4Q25) and the full year were only “a tad below” its expectations.
“We tweak our FY26 and FY27 earnings by 2% and minus 3%, introduce FY28 earnings and maintain our target price of 75 sen.
“We gather that Capital A should have its Practice Note 17 classification uplifted by May or June at latest.
“Following that, we believe it will be able to raise more capital, publicly list its subsidiaries and dividend their shares in specie to shareholders.”
Maybank IB noted that the group’s 4Q25 core net profit of RM174mil brought FY25 core net profit to RM719.3mil.
This was 92% of the research house’s full-year estimate.
“The shortfall was due to Capital A disposing of its five airlines in early Dec 2025 or one month earlier than expected, leading to lower-than-expected aviation (reported under discontinuing operations) earnings,” it added.
Maybank IB has maintained its “buy” call on Capital A.
Meanwhile, Kenanga Research has a “market perform” rating with a target price of 70 sen.
It has also kept its earnings forecasts unchanged.
Kenanga Research pointed out that Capital A’s FY25 revenue rose by more than 12% led by ADE (up 25%), AirAsia Move (up 16%) and Teleport (up 11%) which more than offset lower AirAsia Next (down 5%).
Furthermore, the strong showing from ADE was due to capacity expansion with 16 lines operational at year-end and the induction of Air France aircraft for maintenance.
Kenanga Research said looking ahead, under ADE, the focus is to shift towards capturing high-yield third-party maintenance volumes and expanding external customer base, following full fleet restoration and improved turnaround.
As for Teleport, the focus remains on increasing wallet share from China’s top five eCommerce marketplaces by 30% and deepening collaboration to increase the capacity and reach of its more than 50 partner airlines.
“It targets to capture market share across longer-haul trade lanes, specifically servicing eCommerce movement from China via Asia (including Oceania) through the Middle East and into key European destinations.
“Overall, the group registered a FY25 core net profit of RM77mil.”
