Operation wise, AA work perfectly fine. With 90% loading factor, what to worried? This is the 1st time I saw 90% loading factor. Lol. Don't think that others airline can beat this.

Base on today currency, I will expect about RM200m forex loss in Q3 income statement. Not sure how is the public & FF view on this.

@ Kyou, yes. Fuel is a significant operation cost for AA. It is about 25% of revenue is use of fuel. But AirAsia has hedged about 75% of its jet fuel requirement at an average effective cost of US$55 per barrel for year 2016 and 45% of US$58 per barrel for year 2017. Not much impact to AA until 2017.

Declared dividend or not, it's not really important. It's how to going to use that money. I personally prefer TF use that money to reduce debt. Lol.

My guess: PP will hold until the completion of selling AAC. Then this money will declared as dividend RM0. 80 - RM1.00 so that TF can use this div to pay PP. No need loan from Bank. Save 5m interest per month.

I almost sai lang. Hope that this is right investment decision.

So far I din see any analysis is not included dilution impact after that announcement. Lol...

@The One. Wake up friend, this news is more than half year ago. Already reflected in share price long long time ago.

Later at price Rm3.00, he will start to curse again.

I have a lot of c34 also, average cost now 32 cent.

This supermx2 is sick. Keep ask person to sell last week but now himself is buying. I cant stop him to sell / buy, the only thing i can do is ignore him.

赌神, will diluted.
Let's say the current price is RM3.00 with 100 share in total. Market cap is RM300
Now private placement with extra 20% share with price RM2.00. So is 20 share x RM2.00 = RM40 cash.

Total no of share now is 120. Market cap before dilution + Cash = RM300 + RM40 = RM340

In term of mathematic, the fair price is RM340 / 120 = RM2.83

Impact is about 6% reduction in current share price base on mathematics. But the current share price is already consider dilution factor, so it's hard to tell how much of the impact.

@spy008, oh ya, you are right. Thanks to point it out.
But the impact is not that significant compare to the forex gain loss. If ringgit is depreciate from RM3.9 to RM4.1 vs 1USD, the forex gain loss is about RM250M - RM300M in income statement.

My personal opinion, the currency impact is not that serious.

1. It's natural hedging business. the heavy forex loss is mainly due to debt amount increase in RM. But in reality your asset which is driven in US dollar should offset the impact. But appreciate in asset cannot reflect in income statement.
For example: I buy a plane cost me RM3M (USD 1M base on buying currency) loan amount. Assume no appreciation for this asset. Currency now is USD 1 : RM 4. You forex loss will report as RM1M in income statement, but your asset is actually worth RM4M, but in booking value is worth RM3M.

2. AA ald hedged 58% of its US dollar liabilities as mentioned in public news.

3. The only impact due to weaken of ringgit is margin cut in term of carrier business (operation profit) but not forex gain as we saw in income statement:
For example: Last time ( USD 1 : RM 4) you use Perdua Myvi (RM50k) to do Uber business, now you have to use Honda City (RM70k) to do uber business.

Please correct me if I'm wrong. Appreciate your comments.

Not much "news" now, just waiting for Q3 loading factor then we will roughly know Q3 income. My guess now for EPS is about 12 cent after diluted. You all can watch korea drama "On the Way to the Airport" while waiting. Lol

Not going to change anything but this appeal is a must do action for AA so that AA can maintain their reputation / image by having "cheap air travel" for everyone. Free advertisement. If they can fight something better at the end, it is a extra. No harm to appeal.

AAC is something like REIT to me, The PE itself should be around 20, but now market treat it with PE6 only. Now someone offer you with PE 30+. If I'm TF, i will sell it also la.. lol..

Start a new business or keep doing current business is still a business to me. As long as is a good call to continue doing their business then it's fine. I do know why you differential it between new and old. Rent or own an asset is just a financial decision to me.

It's not a new thing in business world la, it is very normal to do it like this way. Example:
Imagine that TF have property worth RM1m, rental is 10k per annual. Rental yield is 1%. But now TF need money to growth business, then he have few options:
1. refinance as per what you say, but interest charge u 3% per annual.
2. Sell it RM1m and rent it with 10k.

Sometime when Peter lynch buy the stocks, main reason is only due to the asset itself worth much more than their current share price, nothing wrong for AA if they sell AAC to realize some profit by reducing their debt and declare as dividend. Jz my 2 cent.

BBoy, not agree with your statement. If your asset is worth RM35b but market treat is as RM15b and now someone offer you RM41b, will you sell it? Not to say selling it is a good idea for business, but it's definitely a good thing to reflect it better in share price.

RM2 extra for domestic (milo ais), RM3 extra (milo air + roti kosong) for ASEAN country, RM41 extra for other international flight (japanese food dinner set). In term of AA margin is still the same since can pass through this cost to consumer. In term of demand, you have imagine yourself. Will you stop flying because of this extra cost? Got impact or not is up to your imagination.

Topglove2, may I know your TP RM2.5 is base on what PE?

Downtrend is good time for person would like to collect good fundamental stocks. Use all my backup cash (10% of my portfolio) in AA C34 with price 0.29. Not more money to buy and wish to hold them at least 3 months. Wish me luck and happy investing to you all.

if 卵 can sell 41b ringgit and only cut 25% of profit, I die die also sell.

I guess the demand for air carrier wont decrease because of this PSC. If this is extra cost to AA but not to others airlines, then is different topic. If this cost is apply to all the airlines, who will suffer more? I guess is MAS since they have operation losses now. Then who will benefit from this if MAS is suffering? Lol.. Anyway, this is my personal view and im not qualify to ask someone to buy / sell.

i guess this will depend on who get more benefit in their pocket. MAHB or MAS? lol..

This cost always pass-through to consumer. Rumors say domestic is increase RM2 and international increase RM8 only. You won't stop flying because of this few bucks.

I think all of us are welcome all of the negative / positive comments here with logical thinking. But not something fall from sky. E.g. The target price for AA for this year is RM100.. lol

Cost increase? what is the cost u refer to?
Share dilution? All the analysis already reflected this impact. Target price is RM2.5? Base on PE 5? lol..

supermx2 really nothing to say liao, now say "dark hands" pula.. what's next? End of the world?

Topglove2, this is the simple mathematics i refer to. You only need to know + - x /

If this happened, operating profit will reduce to 1.3b (reduce profit after selling of AAC (300m) and saving in interest (150m)). With PE 8, market cap is around 10.4b. 1b cash from private placement, it's worth 11.4b, convert to per share after diluted. It's RM3.45!!!!

Total debt to MYR3.4b is assumed selling of AAC wont distributed as dividend, am I right? The debt of AAC should be around 0.5b USD only. Let say AA distributed RM1.00 as special dividend and debt become 8b, sound good enough to me.

later someone will related it to JP Morgan vs Maybank like MU vs Selangor

If selling of AAC distribute as dividend, will the exercise price adjust it accordingly? Sorry to ask this amateur question here, very new to call warrant.

5. Fed Interest hike - 25bps increasing is around 6m extra interest for AA quarterly. AA with 400m operating profit each quarter, 6m is not a big impact.

I try list down all the negative things can happened to AA:
1. Zika - no impact, e.g. everyone still fly to brazil for olympic
2. PSC - almost no impact to AA, can pass through the cost to customer and no 1 will stop flying because of this few bucks.
3. Forex loss - Temporarily effect, just some number in accounting basis but not cash. Plus AA asset mostly driven by USD.
4. Competitors - With introduction of new planes, A320neo, AA will leading compare to others since AA can save a lot in operation cost.

Anything else?

Topglove2, common sense? debt reduce from 10b to 7b is nothing, but PSC in few buck is something. Lol.. One thing u are right is Warren Buffett didn't ask us to study CFA for investment. But he did ask us to know simple mathematics.

You still not sure how the business model work. If new Prius able to let me earn more money, why not? operation margin is 25%, interest is just 6%. Please let me know which one is more worth?

Topglove2, I already told u Airasia is the top ranking in low cost carrier in the world. Please google and read it. Still rank in as selangor team? lol..

Topglove2, why not you mentioned new airbus a320neo can save 20% of operating cost? Mentioned about PSC which can 100% pass through to customer? Low demand boz this few ringgit extra? Sound funny to me, correct me if I'm wrong.

God of Truth use Zika tactic
Supermx2 use JP Morgan
topglove2 use PAC

I highly doubt that they are same person.
What's next?

3% increase is still nothing, Jz like drop 3% is nothing as well. We are trying to aim big with minimal risk.

If purely JP Morgan analysis can make u gain more in stock market, please follow their analysis will do. Good luck to you.

Topglove2, maybe you still don't know that AA is the 4th largest low cost carriers in the world. If we can't compare with no 1, 2, 3 one, then compare with who? compare to your "plane"? lol.. or u rank Selangor is worldclass football team?

PE 7 for AirAsia in JP Morgan Analysis? Ryanair with PE 11.5 now, Southwest Airlines with PE 9.7 now, even EasyZet with PE 8. Why put AA in 7? Plus JP morgan did not take into account the big cash out of AAC. If you tell me distributed RM1 as dividend then the share price become RM2.5 sound more make sense. lol

Topglove2, please read JP Morgan content before you comment. Don't just read the cover from the book and talk like u wrote the book.

Don't expect supermx2 to keep quite la. The only function of him is make noise. Later AA become RM6.00, he will still keep asking u to buy it.

I'm agree with cruger12345. The only downside factor is forex loss only. But others fundamental are in good ways. downside risk jz 8% to 2.5, potential upside can up to 4.0 by this year. To me, it is worth to bet on AA. All in status now. Wish me luck and happy investing.

last accumulation for me. average 2.85