1. Due to yield pressure, AA accounted for just half of our previous full-year forecast against a more typical 55%-60%.

2. Yield pressure will persist in 2014 as MAS is intent on defending its market share.

3. AA key Malaysia earnings fell 22% on-year on the back of a 12.2% fall in base yield as competition hit hard, coupled with a 3.8% weakening of the ringgit, which lifted AirAsia‟s substantial US$ cost base.

4. AA base yield decline in 3Q13 had accelerated from the 10.6% on-year fall for 2Q13. The weakness in Malaysia was augmented by the collapse in Indonesia’s bottomline as yields also fell from competition and the rupiah depreciated.

5. AA net effect was that the better on-year overall associate performance helped temper, but could not completely overcome, the pressure on Malaysia.

6. AirAsia may suffer fare deflation for at least the next two years as the current heavy competition could prevent it from passing through to passengers the 9% rise in landing charges from January 2014 onwards, the impending 9-11% rise in airport passenger service charges in February and the 6% GST from April 2015 onwards.

So how now? Will the new year low at 2.39 hold? Again with no dividend & Fed taper news & China PMI falling, will the foreign funds buy more or otherwise? Careful now!

Heheheheheheheh!

Investors become emotionally attached to a stock and overlook the company's shortcomings. Whatever the reason loving a stock, separate your emotions from the hard reality!

Wakakakakakakakakakak! If business does well, stock eventually follows! Cheers!

Folks, shares of stock lose value when company profits drop!

But why hang on to shares that are depreciating? Hoping the shares would pick up again? But this is a very practical way to see your money melt down like a burning candle.

Isn't it, folks? Heheheheheh!!

Optimism is denial, so face the facts and move on. It is wise to direct your anger towards problems not people, to focus your energies on answers not excuses.

Wakakakakakakakakakakak!!

A sad day for investor as the investor of today does not profit from yesterday's growth. What a pity?

Investors become emotionally attached to a stock and overlook the company's shortcomings. Whatever the reason loving a stock, separate your emotions from the hard reality!

Risk comes from not knowing what you're doing! Careful now!

Rwemember folks, if a business does well, the stock eventually follows! Will the it test the year low support level at 2.44 again?

Hmmmmmmmmmm...only time will tell!

Technical Outlook

From the daily chart (Chart 2), we can expect Airasia to find support at the gradual uptrend line (SS) at RM2.45. However, the stock has been moving in a 2-year downward channel (see Chart 3) where the support is at the lower boundary (at RM2.30). If this support level (from RM2.30-2.45) cannot hold, Airasia will test the psychological RM2.00 mark. Below that, it may test the long-term uptrend line support at RM1.60.

Conclusion

Based on challenging operating environment, poor financial performance, demanding valuation & deteriorating technical outlook, I rate Airasia a SELL!

From nextrade

So how? Will AA close above 2.50? Hmmmmmm..!!

Curent Borrowings/Liabilities
3Q13: Rm899.357m
2Q13: Rm844.289

Finance Costs Bank borrowings:
3Q13:(Rm106.343m)
2Q13:(Rm109.412m)

CURRENT LIABILITIES

Amount due to a related party
3Q13: Rm72.025m
2Q13: Rm36.905m
1Q13: Rm12.639m

Why?

Foreign exchange gains/(losses) on Borrowings:

Realized gains/(losses)
3Q13:(-Rm1.191m)
2Q13: Rm1.694m
1Q13:(-Rm2.900m)

Unrealzed gains/(losses)
3Q13:(-Rm269.952m)
2Q13:(-Rm187.679m)
1Q13:(-Rm68.633m)

Will the weak ringgit good for aviation business with massive debt?

Total Debt
3Q13: Rm9.202b
2Q13: Rm8.813b
1Q13: Rm8.464b

Time will tell!

The ringgit was traded lower against the US dollar in the morning session today due to renewed interest for the greenback in the global market.At 9.27am, the ringgit was quoted at 3.2065/2095 against the greenback from yesterday's close at 3.2045/2075.

Total Debt
3Q13: Rm9.202b
2Q13: Rm8.813b
1Q13: Rm8.464b

Borrowings are denominated in US Dollar (predominantly), RM and Euro. So folks, is the weak ringgit go for AA?

Will it close above 2.50 for today folks? Only time will tell!

D7 0233 21/11/2013 09:40 PM PERTH-KUALA LUMPUR CANCELLED

D7 0181 21/11/2013 09:00 PM MALE-KUALA LUMPUR CANCELLED

QZ 8208 21/11/2013 08:45 PM JAKARTA-KUALA LUMPUR CANCELLED

AK 5173 21/11/2013 08:40 PM LABUAN-KUALA LUMPUR CANCELLED

QZ 8451 21/11/2013 05:45 PM BANDUNG-KUALA LUMPUR CANCELLED

QZ 8162 21/11/2013 04:15 PM JAKARTA-KUALA LUMPUR CANCELLED

QZ 8393 21/11/2013 11:10 AM DENPASAR-KUALA LUMPUR CANCELLED

QZ 8209 21/11/2013 09:15 PM KUALA LUMPUR-JAKARTA CANCELLED

QZ 8452 21/11/2013 06:15 PM KUALA LUMPUR-BANDUNG CANCELLED

QZ 8163 21/11/2013 04:40 PM KUALA LUMPUR-JAKARTA CANCELLED

QZ 8394 21/11/2013 11:40 AM KUALA LUMPUR-DENPASAR CANCELLED

D7 0180 21/11/2013 09:20 AM KUALA LUMPUR-COLOMBO CANCELLED

D7 0232 21/11/2013 08:50 AM KUALA LUMPUR-PERTH CANCELLED

D7 0170 21/11/2013 02:35 AM KUALA LUMPUR-JEDDAH CANCELLED

View here: http://flight.klia.com.my/fids.aspx

Yes folks, did you get some? It's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

Cheers to all! Heheheheheheheheh!!

Folks, I don't look to jump over 7-foot bars: I look around for 1-foot bars that I can step over. How about you, folks?

Heheheheheheheh!!

The wise things to do when investing is to use your head & not to follow your emotions! Risk comes from not knowing what you're doing, folks! Careful now!

Will the pullback continue or just only a "dead cat bounce"? Remember folks a dead cat bounce is a small, brief recovery in the price of a declining stock!

Careful now!

01 month
High: 2.92 (22/10/13)
Low : 2.44 (21/11/13)

12 months
High: 3.54 (05/06/13)
Low : 2.44 (28/08/13)

Historical High: Rm4.00

Will it test the crtical support level at 2.44 again? Hmmmmm......!!

Will there be another dumping tomorrow? Only time will tell, folks!

Will it close above 2.50?

In september 2013 I posted this: "Why hang on to shares that are depreciating? Hoping the shares would pick up again? But this is a very practical way to see your money melt down like a burning candle."

So will the burning stop? Folks, only when the tide goes out do you discover who's been swimming naked! Hahahahahahahha!!

21/11/2013 TP 2.55 CIMB (Latest)
22/08/2013 TP 3.45 CIMB

21/11/2013 TP 2.80 MAYBANK (Latest)
22/08/2013 TP 2.95 MAYBANK

21/11/2013 TP 3.51 Kenanga (Latest)
28/10/2013 TP 3.51 Kenanga
22/08/2013 TP 3.51 Kenanga

21/11/2013 TP 3.70 RHB (Latest)
14/11/2013 TP 3.63 RHB
22/08/2013 TP 3.94 RHB
16/08/2013 TP 3.94 RHB
21/06/2013 TP 3.94 RHB
23/05/2013 TP 3.94 RHB

21/11/2013 TP 3.78 MIDF (Latest)
22/08/2013 TP 3.78 MIDF

03/10/2013 TP 2.90 HWANGDBS
22/08/2013 TP 2.90 HWANGDBS

27/09/2013 TP 4.20 ALLIANCE

24/09/2013 TP 3.91 TA

22/08/2013 TP 3.08 HLG

22/08/2013 TP 2.80 AMMB

If stock market experts were so expert, they would be buying stock, not giving advice. How?

China’s asset bubble increasingly depends on financing from the shadow banking system. The carry trade — borrowing dollar loans at low interest rates offshore and converting the loans into yuan, for lending at a high interest rate — has become a significant source of funding in the shadow banking system.

The rising share of unstable financing for the country’s asset bubble threatens a chaotic ending.

The Fed’s massive quantitative easing has driven up China’s money supply. If the Fed unwinds the QE, China’s bubble will burst. What next to happen?

Well folks, another bad news for AA!

Malaysia’s ringgit fell by the most in two months after minutes of the Federal Reserve’s last meeting renewed speculation it will trim monetary stimulus, a policy that’s driven inflows to emerging-market assets

The ringgit weakened 0.9 per cent to 3.2110 per dollar as of 1.22pm in Kuala Lumpur, the biggest drop since September 30, according to data compiled by Bloomberg. That was the weakest level since November 13. The currency declined 1.7 per cent in November, trimming this quarter’s gain to 1.5 per cent, the best performance in Asia.

Well folks, weak ringgit is bad for AA! In the Q3 forex losses stood 185.9 million ringgit. So how?

Investors have short memories!!

Asian shares hit by double blow of China PMI & taper!

Thai and Indian shares lost over 1% on fears of a looming reduction in U.S. monetary stimulus while Philippine stocks ended 0.8% lower. Kospi down 1.4%. while JSX COMP down 1.12%!

Another selldown in the Asian markets in the making? Careful Now!

The euro is being pressured after a report suggested the European Central Bank could implement further monetary easing. A report on Wednesday cited two unnamed sources as saying the central bank was considering lowering its deposit rate, one of its two main lending rates, to below zero.

What...below zero? Something brewing in euro? Is the stock market bubble waiting to burst or a double dip? Careful!

folks, European equities are expected to open lower on Thursday after minutes from the U.S. Federal Reserve's October policy meeting hinted at stimulus tapering.

How?

Are the cracks in the euro starting to show?

"Some cracks in the euro's surface have already been appearing in recent weeks:

1) flow signals from the euro zone balance of payments have been less positive than we expected,

2) the price performance of euro zone stock markets is no longer leading,

3) euro zone growth expectations are no longer grinding higher," Jens Nordvig, managing director and global head of FX strategy at Nomura, said in a note

The euro's bull-run since April may be running out of steam," said Nomura's Nordvig.

Euro zone unemployment will remain near its record high for the next two years amid subdued economic growth, the European Commission said.

Well folks, another issue to add to the misery!!

Will the year low at 2.44 hold for today? With no dividend, poor earnings, Fed taper & China PMI dipping will the foreign & local funds dump this share? Will the dumping get aggressive & cause panic selling? Will it create new year low?

01 month
High: 2.92 (22/10/13)
Low : 2.46 (19/11/13)

12 months
High: 3.54 (05/06/13)
Low : 2.44 (28/08/13)

Historical High: Rm4.00

Investors become emotionally attached to a stock and overlook the company's shortcomings. Whatever the reason loving a stock, separate your emotions from the hard reality!

When there was a management reshuffle, I mentioned that something brewing in AA!

When TF Twitter account, stated this(04-Nov-2013): "Just finalised 3rd quarter numbers. Very pleased. 4th quarter looks very very strong. Costs down as well. 2014 going to be a big year," I mentioned in the business world, the rearview mirror is always clearer than the windshield & if a business does well, the stock eventually follows!

So how now, folks? Will the bashing stop soon? Worst still with the latest Fed taper news & China PMI falling is just like adding salt to the injury!

AA third-quarter profit plunge 77.5 per cent as forex losses on borrowings and a strategy of offering low ticket fares ate into margins.

Foreign exchange losses stood 185.9 million ringgit in the third quarter, compared to a gain of 100.8 million ringgit a year ago.

The investor of today does not profit from yesterday's growth! How now?

Will the year low at 2.44 hold? Careful now as no dividend for Q2 & now Q3! A falling knife, folks?

12 months
High: 3.54 (05/06/13)
Low : 2.44 (28/08/13)

Historical High: Rm4.00

AA plans to take delivery of 12 A320 aircraft in the 4Q, eight of which will be deployed in Malaysia and the rest in Thailand. How?

Cash and cash equivalents
3Q13: Rm1.467b
2Q13: Rm1.639b
1Q13: Rm2.156b

Total Debt
3Q13: Rm9.202b
2Q13: Rm8.813b
1Q13: Rm8.464b

Folks, it's far better to buy a wonderful company at a fair price than a fair company at a wonderful price.

At what price will AA be a wonderful company? Rm2.00? Rm2.20? possible folks? Time will tell!

AA third-quarter profit plunge 77.5 per cent as forex losses on borrowings and a strategy of offering low ticket fares ate into margins.

How?

Will the dumping of AA shares stop soon?

You are right!

21/11/2013 TP 2.80 MAYBANK
22/08/2013 TP 2.95 MAYBANK

21/11/2013 TP 3.51 Kenanga
28/10/2013 TP 3.51 Kenanga
22/08/2013 TP 3.51 Kenanga

21/11/2013 TP 2.55 CIMB
22/08/2013 TP 3.45 CIMB

If stock market experts were so expert, they would be buying stock, not giving advice. How?

21/11/2013 TP 2.80 MAYBANK
22/08/2013 TP 2.95 MAYBANK

21/11/2013 TP 3.51 Kenanga
28/10/2013 TP 3.51 Kenanga
22/08/2013 TP 3.51 Kenanga

21/11/2013 TP 2.55 CIMB
22/08/2013 TP 3.45 CIMB

If stock market experts were so expert, they would be buying stock, not selling advice. How?

If stock market experts were so expert, they would be buying stock, not selling advice.

How?

Yes folks, AA can fool some of the people some of the time but AA cannot fool all the people all the time!

How?

Remember folks, risk comes from not knowing what you're doing! What a pity! Buy low & sell higher. Not buy higher & stuck with it! How?

When will the big boys start selling agressively? Will it create a panic selling? Will the weak support 2.47 hold?

Time will tell! Heheheheheheheh!!

CIMB - TP 2.55

1. Due to yield pressure, it accounted for just half of our previous full-year forecast against a more typical 55%-60%.

2. Yield pressure will persist in 2014 as Malaysia Airlines (MAS) is intent on defending its market share.

3. The key Malaysia earnings fell 22% on-year on the back of a 12.2% fall in base yield as competition hit hard, coupled with a 3.8% weakening of the ringgit, which lifted AirAsia‟s substantial US$ cost base.

4. The base yield decline in 3Q13 had accelerated from the 10.6% on-year fall for 2Q13. The weakness in Malaysia was augmented by the collapse in Indonesia’s bottomline as yields also fell from competition and the rupiah depreciated.

5. The net effect was that the better on-year overall associate performance helped temper, but could not completely overcome, the pressure on Malaysia.

6. AirAsia may suffer fare deflation for at least the next two years as the current heavy competition could prevent it from passing through to passengers the 9% rise in landing charges from January 2014 onwards, the impending 9-11% rise in airport passenger service charges in February and the 6% GST from April 2015 onwards.

With negative news(Fed taper & China PMI dip) another 10% to 20% discount folks? Possible folks?

Will it get cheaper than 2.44? Be patience folks as you will be rewarded. Panic selling will set in once the big boys start selling aggressively.

The investor of today does not profit from yesterday's growth.

CIMB lastest TP at 2.55! With negative news(Fed taper & China PMI dip) another 10% to 20% discount folks?

Possible folks? Hahahahahahah!!

Hahahahahahahahahah....... must be buying & now stuck at a higher price! What a pity, folks!

Optimism is denial, so face the facts and move on. It is wise to direct your anger towards problems not people, to focus your energies on answers not excuses.

Will it get cheaper than below? be patience folks as you will be rewarded. Panic selling will set in once the big boys start selling aggressively! Remember folks, don't look to jump over 7-foot bars: Look around for 1-foot bars that you can step over. Hahahahahhahaha!!

Price Performamce:

01 month
High: 2.92 (22/10/13)
Low : 2.46 (19/11/13)

12 months
High: 3.54 (05/06/13)
Low : 2.44 (28/08/13)

Historical High: Rm4.00

Price Performamce:

01 month
High: 2.92 (22/10/13)
Low : 2.46 (19/11/13)

12 months
High: 3.54 (05/06/13)
Low : 2.44 (28/08/13)

Historical High: Rm4.00

Will 2.47 hold? Profit down 78%! Fed tapering in the highlight again! China PMI dips to 50.4%! What does that tell you? Meaning more sellers than buyers!

Risk comes from not knowing what you're doing! Careful now!

1. Due to yield pressure, it accounted for just half of our previous full-year forecast against a more typical 55%-60%.

2. Yield pressure will persist in 2014 as Malaysia Airlines (MAS) is intent on defending its market share.

3. The key Malaysia earnings fell 22% on-year on the back of a 12.2% fall in base yield as competition hit hard, coupled with a 3.8% weakening of the ringgit, which lifted AirAsia‟s substantial US$ cost base.

4. The base yield decline in 3Q13 had accelerated from the 10.6% on-year fall for 2Q13. The weakness in Malaysia was augmented by the collapse in Indonesia’s bottomline as yields also fell from competition and the rupiah depreciated.

5. The net effect was that the better on-year overall associate performance helped temper, but could not completely overcome, the pressure on Malaysia.

6. AirAsia may suffer fare deflation for at least the next two years as the current heavy competition could prevent it from passing through to passengers the 9% rise in landing charges from January 2014 onwards, the impending 9-11% rise in airport passenger service charges in February and the 6% GST from April 2015 onwards.

So how now? Will 2.47 hold for today. Again with no dividend & Fed taper news, will the foreign funds buy more or otherwise? Careful now!