Bursa Malaysia Stock Watch
Aviation (Overweight) - Jet Fuel Price High at US$135/bbl
kltrader
Publish date: Fri, 30 Mar 2012, 11:53 PM
kltrader
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Aviation (Overweight)
Jet Fuel Price High at US$135/bbl
- Political Tension in MENA region had caused jet fuel price to increaseto US$137/bbl.
- AirAsia has just announced higher fuel surcharge (+30-50%), which we hasestimated to increase revenue by ~RM72m, just enough to offset increment ofUS$5/bbl in 2012.
- MAS has not made any announcement yet on higher fuel surcharge. Itswholly owned subsidiary Firefly has re-introduced fuel surcharge.
- Based on our sensitivity test, we expect AirAsia to remain profitable ifjet fuel priced increased to US$140/bbl, while MAS still in the red in FY12.For every US$5/bbl increase in jet fuel price, AirAsia's EPS will decrease by~6%.
- AirAsia is currently trading at a discount to regional and global LCCpeers despite achieving highest ROEs and potential higher earnings fromrecognizing contributions from Thai and Indonesia associates post listingin 2012. Furthermore, LCC business model is expected to sustain during economyslowdown.
- Maintain Buy on AirAsia with Target Price of RM4.50 and Sell on MAS withTarget Price of RM0.82.
Source: HLIB Research 30 March 2012
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hatifahs
I think mas will definitely goes up this year bcas all analyst too much condemn this stock,sometimes some analyst cant be trusted and personally I don't believed it.tq
2012-03-31 22:02