PETALING JAYA: Capital A Bhd
’s exit from Practice Note 17 (PN17) status marks a significant turning point for the aviation-linked group, with analysts remaining upbeat on its prospects as its non-airline businesses continue to gain traction and diversify earnings streams.
“We remain optimistic about the group’s expansion plans and leverage AirAsia X Bhd’s (AAX) growth over the longer term,” Hong Leong Investment (HLIB) Research said.
“Upliftment of its PN17 status should boost investors’ confidence and support valuation re-rating.”
It has maintained its “buy” call on the stock with an unchanged target price of 76 sen, based on sum-of-parts, based on 20 times price-to-earnings multiples for Capital A and a RM2.20 target price for AAX.
Similarly, MBSB Research also retained its “buy” recommendation, although it revised its target price lower to 63 sen from 77 sen after adjusting earnings estimates and rolling over its valuation base year to financial year 2027.
The research house said the group continues to diversify its earnings base by strengthening non-AirAsia revenue streams across its ecosystem companies.
The upliftment from PN17 status took effect on May 20 after Capital A posted two consecutive profitable quarters following the completion of its restructuring exercise and disposal of its aviation business in December 2025.
HLIB Research noted that the group’s latest quarterly performance met a key requirement for the regularisation exit.
For the first quarter ended March 31, 2026, Capital A recorded core earnings of RM24.8mil, lower quarter-on-quarter and year-on-year mainly due to the absence of inter-group interest income previously contributed by the aviation segment.
