Calvin at least put his view about AA which i do see him highly analytical but just though he can be a bit bias

@Investo - It is alright to "attack" if you disagree with comments. The investors are clever enough to interpret and use it for their investment decision. Your comment on "Maybe they buy too much AA b4 results N now scare AA drop so must attack anyone who call sell even if sell is proven true" is baseless to me.

AirAsia 去年9月與韓國KBS合作的韓劇《通往機場的路》，即將於3月1日正式在台開播

@ calvin - it seems that you just like to mislead others. Why is Texchem share price is $1.50 when the NTA is $2.30

@niki - i believed i3 PE is based on EPS for FY16 while the research house is based on core earning EPS eg striping out one off / non recurring items. If you are looking at research house FY17 numbers, they would have include a larger share base eg post TF private placement.

https://www.youtube.com/watch?v=tA8kX2__D7g

@ newbie18 in April 16, Duck bank had a downgrade call on american airlines, 1-2 months later the airlines stocks rocketing high - go and check the share price of american airlines. They can't even get right closer to their home.
http://www.marketwatch.com/story/airline-shares-slump-on-deutsche-bank-downgrade-2016-04-01

@ignissimia - yeah 10-15 cents at least. This will be decent income to institution investors. So smart money has to get the shares by driving up and down the prices trying to get from the retailers. If smart money is involved, then confirm it is uptrend. We just wait for the time to exploit. If the price is not volatile - then i am concerned

DBS said Airasia top pick

http://www.dbs.com.sg/treasures/aics/templatedata/article/generic/data/en/GR/022017/170210_insights_flying_a_little_lower.xml

Warren Buffet said "Buy"
http://etfdailynews.com/2016/11/21/warren-buffett-is-finally-bullish-on-airlines/

Look at how Ryanair has grown.
http://shares.telegraph.co.uk/fundamentals/?epic=RYA

market cap from RM7B to RM20B in the making

@SSY3 - Month of May is just a dessert, AA is in the process to replicate a Ryanair or Easyjet in Asia Pacific.

@ignissimia. If you looked at 2015 dividend amount, the calc was based on total earning not net operating profit (if my memory works). It does not make sense to use net operating profit as it is before tax so i think net operating profit was a typo back then when they did the announcement.

Too many one off items each quarter - gain and loss. They could have done a better job to smooth it out and to keep the analysts to focus on RM2B profit. The conf session saw analysts busy focus on working out the core earning. They failed to see those "one-off" event are essentially part of operation (disposal, utilisation changes, hedging. etc) and it is part of AA airline operation for better cost optimisation. They need to deliver like what AP put it 400m Q1; 500m Q2; 500m Q3; 600m Q4. and keep the analyst focus on big numbers, overall profitability. They need a better CFO that can "sell" the numbers not just report the numbers.

@Calvin, on the off balance sheet debt you mentioned, you need to see that from business value. The current backlog for plane order and delivery is 8-10 years. The backlog is value accretive to AAC business (leasing arm) - internally used by AA or lease to external/assoc. So it is a big mistake to assume all orders are for internal use (you do not see the business model for aircraft leasing). And in fact this "balloon debt" lift up AAC valuation. With AA disposal of leasing business, this ballon debts will reduce significantly. AA basically unlock the the leasing business and the value of these backlogs.

@Calvin, did the boss of Texchem tell you how many sushi king outlets they are going to open? in malaysia or overseas? did the boss mention what growth plan he has for the food division and other division? did he tell you his plan to unlock the prime asset value? Do you mind sharing?

@batu88: another takeaway from the conf call is the answer to the forex risk. Essentially the forex risk for the unhedged USD borrowing for aircraft deployed to associates is now a history eg by transferring aircraft and debts to AAC. The malaysia aircraft borrowings are all hedged. The only forex risk is with operation eg fuel, maintenance and they are 50% hedged.

The IPOs is also a good surprise and seems lots of work are happening. The facts that IPO auditor is involved showed that the submission will not be far.

Agreed with JN88 calc dividend = 15sen. The announcement will be around May eg after conclusion of the audited account. May will be an explosive month for airasia, AAC news, Q1 result, IPO news, 15 sen dividend.

Ryanair market cap $20B fleet size 372

Dividend policy

The Board of Directors of AirAsia Berhad (“AirAsia” or “the Company”) wishes to announce that the Company has adopted a dividend policy to pay an annual dividend of up to 20% of the net operating profit earnings per share (per the audited financial statements of the Company), rounded to the nearest whole sen number, provided that such distribution will not be detrimental to the Company’s cash flow requirements. This dividend policy shall commence for the financial year ending 31 December 2013.

Announcement date: 26 Febuary 2013

市场不会给低吸者更多的机会。你能低吸的票，或还有更低的底出现。但真正筑出了底的，是不肯下跌的。

probably 450+M if FX loss <100M

Let me put some context here as some may it useful. For those who are not interested just skip my comment.

If what TF mention is correct, it will be a huge huge plus as it successfully take away the FX risk. Batu88 you are correct for Q4 2015. Look at the entire year of 2015 the extent of FX loss (from 3.50 to 4.30). If you compare the Q42015 vs actual 2015 audited, there was a gap of full year FX loss reported between announcement and audited. Though the overall net profit remained pretty close. I am not sure if they were just a simply reclass or AA trying to fill up the gap by bringing in other levers. In 2016 the FX change from 4.30 to 4.50, based on similar logic in 2015, we should expect to see FX loss in 2016 which mean likely will require to reverse out the gain FX reported in Q12016 and provided also for 20 sen loss. If so, it will be damaging to Q416 numbers. Of course this will be the case if AA still doing the same hedging methods like in 2015. The increase in %hedge from 52% last year to 60% along would not suffice. By looking at 2016 FX numbers, it seems like they have done additional things making the cashflow hedge more effective (as ineffective cashflow hedge will hit the PL) and start hedging the operating lease income portion in 2016. Another possibility could be in 2015 they did not specify well what the 52% was hedging eg to what aircrafts and hence they were deemed ineffective cashflow hedge and hit to PL. They rectified this in Q12016 by properly classified which aircraft loan were being hedged and crawl back the FX gain in Q12016 and since there the start of 10 sen =20m. Hopefully they get it right this time otherwise a surprise in the report the audited account for 2016. I do think that so far good FX numbers in 2016 is not just purely came from increasing 52% to 60%+ hedge, which is why i am asking any sifu here who may enlighten me

Icon: I was earlier having the same thought logic but it wasn't the case for Q2 and Q3. In the Q3 earning briefing note, TF and team guidance 10 sen = RM20m+. It seems pretty well aligned to the FX numbers reported in Q2/3. If you read the latest quarterly report, it said it hedged 62% of the USD loan for aircraft (which deployed to Malaysia). Interestingly, they mentioned about "deployed to Malaysia" starting FY16. So use a hypothetical example, 30% loan for aircraft deployed to Msia and 70% for aircraft sublease to associates, so the split of loan is 2.7B and 6.3B. 62% of 2.7B is hedged and only 1B unhedged. 10 sen change will have 25m impact. As for the 6.3B, these are managed through natural hedge and intragroup settlement. In fact the AR2015 said they also have hedged the FX risk arising from the operating lease income they received. I try to make sense out of and to justify 10 sen=RM20m (do you believe? If this hold water, the FX loss will be <100m for Q4 which will boost the earning). Many of us are concerned over the FX but TF seems very relax and FX did not look at all a concern to him at all.

Based on the split of aircraft, about 45% deployed to Malaysia. But i supposed that given the sublease came later into the picture and probably higher cost / loan, so i think loan for aircraft deployed to Malaysia should be lower. 30% is just the magic number.


Icon8888 they have RM9 billion USD loan, out of which 60% hedged (according to quarterly report). That means RM3 billion exposure

USD strengthened from 4.1 to around 4.4 by end 2016. That is a change of about 10%. According to back of envelope calculation, that should result in forex loss of RM200 mil to 300 mil

SSY3: The market valued 20x PE on SIA (highest valuation in Asia Pac) while AA 6-7x showed market perception and risk appetite. The current associate structure and the complex accounting is really killing the stock value. The ASEAN co if can happen will definitely lift AA stocks closer to SIA.

https://www.youtube.com/watch?v=KbQKgsF2Sdk

Icon: any science on 200-300m FX loss? That's seem to be based on sensitivity analysis in the annual report 5% changes in FX will impact net profit by 300m. But somehow the numbers reported based on Q3, Q2 seems to be much lower..

Fighting with Malindo and MAS no need TF, Aireen Omar is more than enough.

CIMB gave wrong perception

JN88: At current price, the div yield is 5.4%, this is certain profit reward for institutional investors, EPF. It also give us some margin of safety while we betting for AAC + other upside. I remains optimistic on 2017 outlook for AA

AA has 20% dividend policy. That gives you confidence to enter.

JN88: how much do you think AA EPS for FY16?

JN88: how many AA shares you hold currently and at what cost? How much fund you have and how long you are prepare to hold the share then i can tell you buy or not

Meathere, SSY3 couldn't agree more

Good sign - institution become more eager now.

i do not think so. It is so obvious with proper trail of record if they were to do that - do not think they will risk the reputation and suspension of license. They make money on selling and buying CW not by manipulating the mother share price.

The bonus usually already been provided over the year.

what diff btw buy and add? anyone know

CIMB say add.

EPF has continue buying each day 23,24,25 Jan.

The EPF no longer substantial shareholder because of dilution due to private placement. In fact EPF bought 2,000,000 share on 25 Jan per the announcement.

hey mates, slowly, slowly buy

https://www.youtube.com/watch?v=9gWiC7ZuH5w

no wonder foreign funds kept buying. I will be happy if the price come down.

https://www.youtube.com/watch?v=VJ-hz-ADQlQ

do not take all the words and numbers, do your investigation to validate. another points to note, once the AAC sale is done, I think valuation based on EBITDAR will not be relevant. EBITDAR is used for capital intensive business i.e. business that requires continuing huge capital investment.

SS3 - thanks for sharing. I won't bother. I am the investor, I see value in the business, i trust TF is in the process to unlock these value, and is a business with huge potential, with a right and capable management to continue create value, brand, digital agenda and to deal with risks. TF is truly one of the best entrepreneur. Looking at how many awards they won (i mean international awards with top airlines, hey man these are not "kopi" awards), how many of many PLCs can do that. Think about how many hours he and his team are in the business compare to the hours the analysts spend just to write a research report trying to give value to airline business. Think about % of foreign shareholding since the inception in 2004/5 i think 40%+ and today >50% the faith the foreign investors on the back of TF. If i were to break down the share price into 4 category, which one do you see the value of airasia:
- >2x of current price (TF)
- $3-$4 (most analysts 8-9 x FY17 earning and most of them have not incorporated dividends from AAC sale except CIMB & Macquerie)
-$2.40/$2.50 (some deemed all upside/downside already price in and will wait for pull back to enter)
-<$2.20 (DB analyst / JP Morgan - priced it based on so called 6.5-7 x FY17 EBITDAR) i.e earning before interest, tax, depreciation, amortisation and rent.

If you follow analysts - they value airline business based on x of earning or x of EBITDAR in few hours or days and earn $K of wages; or would you follow someone just put in $1B into a business where he does not have to (he can choose for airasia to borrow or private placement by 3rd party). Look at the use of the $1B... part to pair down loan (future loan and not current loan) and part for working capital, so there is no cash issue really. Why he stretch the shareholding to just below 33% of mandatory takeover....i see that...

I thought might be good to share what i know and see.

Warn again to those not buying airasia - please do not watch as they are not your cup of tea.

Now i understand why AAC is such a valuable business especially with the order books that attracts so many bidders. More importantly airasia will become more competitive
https://www.youtube.com/watch?v=yJ9K-tph01g

https://www.youtube.com/watch?v=kfNlOe90xFs