KUALA LUMPUR: Maybank Investment Bank Research is maintaining its target price of RM2.65 for AirAsia, which is 12% above its last traded price of RM2.36.

It said on Monday it expects the low-cost carrier to record strong earnings growth in 2Q14 due to the combined effect of better revenue and lower cost.

“We forecast yield (RASK) to have increased by 3.3% on-year to 15.5 sen/ASK driven by higher average fare and growth in ancillary income. This assumption is based on our observation of published fares and also management’s media statements.

“Unit cost (CASK) is forecast to decrease by 1.8% on-year to 12.6 sen/ASK primarily due to jet fuel price decreasing by 2.3% on-year to US$116.1 per barrel average. Furthermore, many of AirAsia’s cost saving initiatives have yielded positive benefits,” it said.

To recap, Maybank Research expects AirAsia’s 2Q14results, which will be released on Aug 20, to report core net profit of 157mil, a growth of 44% on-year.

It pointed out yields have stabilised and unit cost has reduced due to lower fuel prices in the period.

It said AirAsia’s 2Q14 operating statistics were positive; passenger traffic grew by 2.8% on-year with a load factor of 80.0% (versus 79.9% in 2Q13).

Quarter-on-quarter, passenger traffic grew by a stronger 3.7% while load factor was stable (-0.6ppts).

“We expect yields to have stabilised based on our observation of much higher published fares compared to a year ago,” said Maybank Research. 

Source: The Star Online


Good luck to all Air Asia shareholders.
Soon Everyone Can Fly with the share price.