Icon8888 Gossips About Stocks
(Icon) Air Asia (3) - How Much Will It Benefit From Ringgit Appreciation ?
According to Alliance DBS Research, more than 75% of Air Asia X's expenses are denominated in USD.
As Air Asia has same business model as AAX, I wonder whether it has a similar cost structure ? To find out how the strengthening of Ringgit will affect Air Asia, let's take a closer look at its historical P&Ls.
If I am not wrong, the yellow highlighted items should be mostly denominated in USD.
For revenue, the final quarter of aircraft operating lease was unusually high. I normalised the figure by annualising January to September 2015 figures to arrive at USD248 mil as full year estimate.
For expenses, the FY2015 fuel figure was based on USD82 per barrel. In FY2016, the likely price per barrel should be USD59 (Air Asia has hedged 50% of its requirement at that price). Based on 6.28 million barrels, fuel expense should be USD371 mil.
Based on the adjusted fuel cost, total expense would be approximately USD1.25 billion, out of which USD631 mil will be denominated in USD. This represents approximately 50% of total expenses.
However, after being offset against USD248 mil operating lease revenue, net Dollar denominated expenses is only USD383 mil, representing 30% of expenses.
To determine the impact of USD movement, I did a quick sensitivity analysis based on base case of 4.1 and USD383 mil :-
According to table above, every RM0.10 movement in RM vs USD will result in RM38 mil changes. Based on 2.783 billion shares, approximately 1.4 sen impact on EPS.
Related Stocks
| Chart | Stock Name | Last | Change | Volume |
|---|
More articles on Icon8888 Gossips About Stocks
(Icon) Jaks Resources - IRR Model Shows That RM300 mil Net Profit p.a. For 30% Stake Is Plausible
Created by Icon8888 | May 01, 2020
(Icon) Notion VTec - Forget About The Virus, It Is Time To Rock and Roll
Created by Icon8888 | Mar 10, 2020
(Icon) Sam Engineering - Excellent Result. Share Price Can Potentially Double Within 2 Years
Created by Icon8888 | Mar 01, 2020
(Icon) Alliance Bank - One Off Provision Affected Previous Quarter Earning. Time To Buy On Weakness
Created by Icon8888 | Nov 13, 2019
Discussions
3 people like this. Showing 15 of 15 comments
he need someone to get his portion of share as high as possible, that's simple!!!
2016-03-29 12:20
I have a bit of exposure in Air Asia. Naturally I will like to know more about the group and share it with others. Even though that is the case, I try to be objective when writing about a stock. At the end of the day, it is the profit that matter. If they can't deliver good result next quarter, no amount of writing can push up the price.
2016-03-29 12:23
if they promote when AA at low price e.g. 0.80, that is honest, caring & sharing person...trustable person
if they promote after the price rocket already, that's mean...u know what I mean...
I think in market, they need to find loser to make them a winner, that's normal, therefore, we also cannot blame ICON, he need to earn for living to find loser to compensate her winner
2016-03-29 12:24
Not really, did you read my article "three ways to punt the market" ? Air Asia currently has momentum. As such, even though it has gone up from 80 sen, there is room for further gain (as EPS is strong). In that article, I called that "Surf Riding".
The article is as below, if you are interested
http://klse.i3investor.com/blogs/icon8888/87192.jsp
2016-03-29 12:35
Icon8888, when MYR weak they have forex loss and now should be forex gain with stronger MYR, But how much? are you have calculation?
2016-03-29 12:39
Icon8888, thanks for your analysis. Now AA is flying on its own engines with strong tail winds Oil and Ringgit pushing it higher
2016-03-29 14:59
As Air Asia has same business model as AAX, I expect a similar cost structure
DANGEROUS ASSUMPTION
2016-03-29 15:18
we need to be patient. contra players tend to hit and run ( same as counters @ push & dump ). Both AA and AAX was push down by allegations of irregular accounting . Similar to murky water CEO write up on olam international. AA & AAX ( Tony ) came up with clear picture what they did with their lease and write back between AA and AAX subsidiaries.
With the stronger ringgit and the inflow of E-visa from China. AA and AAx can expect better volumes plus lower fuel prices. The coming quaters will confirm whether the turnaround of both AA and AAx. Both counters have not recover their last year share pricing. AA ( > RM 2.00 ) AAx > 80 ( after their rights )
2016-03-30 11:28
Post a Comment
Featured Posts
Get Your NVDA Share by Opening a Moomoo Account*!
MQ Trading Signals
Time
Signal
Duration
Type
2024-05-07 16:50:00
EMA 5
5 Mins
SELL
2024-05-07 16:45:00
EMA 5
5 Mins
BUY
2024-05-07 16:30:00
MACD/RSI
5 Mins
SELL
2024-05-07 16:00:00
OBV
30 Mins
BUY
2024-05-07 16:00:00
EMA 5
5 Mins
SELL
Apps
Top Articles
1
Good Articles to Share
2
Follow Kim's Stockwatch!
THIS STOCK READY TO SKYROCKET!!! - THE POWER & WATER SUPPLY SERVICES
3
save malaysia!
4
THE INVESTMENT APPROACH OF CALVIN TAN
5
Koon Yew Yin's Blog
Eversendai Corporation made a remarkable comeback in FY2023 - Koon Yew Yin
6
8
Good Articles to Share
Shell in talks to sell Malaysia fuel stations to Saudi Aramco, sources say
#
Stock
Score
Daily Stocks
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Stock Name
Last
Change
Volume
Featured Advertisers / Partners
Ride The Bull Short The Bear
CS Tan
4.9 / 5.0
This book is the result of the author's many years of experience and observation throughout his 26 years in the stockbroking industry. It was written for general public to learn to invest based on facts and not on fantasies or hearsay....
lux88
Icon,looks like u promote AA actively, AA is your largest portfolio?
2016-03-29 12:13