Ha ha, Monday. I also want to do my facial tomorrow....

I suggest all of us key in to buy AAB at 1 sen tomorrow. See if Wellington is willing to sell or not.

My 2 cent analysis:

1. Revenue - up 1.06% to RM1.324b compared to same quarter last year
2. Operating Profit - up 39.8% to RM0.432b compared to same quarter last year
3. Net Operating Profit - up 74.5% to RM0.124b compared to same quarter last year
4. Net profit after tax - down 33.8% to RM0.243b compared to same quarter last year
5. Cash flow - generated RM0.587b from operation, generated RM1.022b from sale of assets, paid off RM1.235b borrowings - net position RM1.838b cash in hand compared to RM0.956b same quarter last year.
6. Current ratio .83 compared to .61 same quarter last year
7. Net assets per share 1.71 compared to 1.64 same quarter last year

Overall, it is a sterling financial performance for AAB. Profitability improved, Cashflow improved, loan reduced and balance sheet strengthened. Net worth RM1.71 per share, cash in hand RM.66 per share. Target share price of RM2.80 by analyst is not unreasonable.

GMT's review blaming AAB of inflating financial position through creative accounting is crap. All companies do that to maximise their financial position. As long as it is done within approved accounting standards it is acceptable.

It doesn't make sense for the share price to dive like this but it is dropping somehow. The Wellington Investment Group is the culprit. It is selling the share bit by bit everyday, driving down the share price and it is holding more than 20% equity of the company. It can really drive down the share price to penny stock as speculated by some and it is highly possible. As of today, It is just 1 sen away from that. Share price may just tank further if it pierce through the RM1 psychological barrier. But this is not fundamental based.

Based on Income statement, AAB is benefiting from the low oil prices. So if the low share price continue into the rest of the year, AAB will benefit more. In the long term, this share will definitely come back.

Extension is pending arbitration proceedings. So it is not really confirmed yet. In Philippines, anything can happen. It's like the Malaysian environment now...

Based on this, if fuel costs is expected to be subdued for the remaining of the year, it should be good for AA. Is that the reason why TF announced that there will be no hedging for next year? They are expecting fuel cost to continue to be low next year?

So if AA hedges 50% of its fuel costs, it should be able to protect half of its fuel costs. If market price of fuel costs goes up to USD160 per barrel (i.e. double the hedged price), the additional cost of the unhedged fuel cost will erase all its profit. But if fuel costs reduced to USD40 pbd, AA should have an additional 50% profit from the half it its unhedged fuel expenses.

Based on my understanding, hedging should be a good thing. It protects the company from further losses if cost of fuel goes up. If the cost comes down, other things equal, the company should not make losses. It merely losses the opportunity to make more profit from the lower oil price. Theoretically, it should be able to achieve its targeted profit.

Wellington Investment is still holding about 20% equity in AA. (about 500 million shares). The problem is that they are selling bit by bit everyday. A few hundred thousand shares. It seems like they are pushing the share price down. Why are they doing that?

AirAsia is trading at RM0.55 discount to NTA. TF will make money is he takes it private now.

Hope AA don't go up so fast. Wait for me to accumulate more before it goes up. AA is a good stock to keep. Price at real bargain now. You can never get it at this price again after this.

What happened? Last minute buying pushed up the share by 5 sen.

My gut feel is that there is more down side to this counter, although it is already at a fairly attractive level.

Hello all,

I am newbie here.

Last year same quarter made less profit but declared higher dividend of 9.5 sen. Wonder why this year, pays only 5 sen.