11 people like this.

33 comment(s). Last comment by Ban Seng Jong 2016-09-29 23:12


8,448 posts

Posted by RainT > 2016-09-21 08:17 | Report Abuse

Thanks Icon

Ricky Kiat

1,356 posts

Posted by Ricky Kiat > 2016-09-21 08:53 | Report Abuse

sell AAC now, short term good, long term not good.
hold AAC now, short term we are not good, long term very very good. (^-^)


1,064 posts

Posted by SharkTank > 2016-09-21 08:54 | Report Abuse

Thank you Icon for the write-up!


11 posts

Posted by bercham11 > 2016-09-21 09:26 | Report Abuse

Thanks for sharing,very informative write up.


489 posts

Posted by angku > 2016-09-21 09:35 | Report Abuse

Thank you. I enjoy reading your article


4,267 posts

Posted by mancingbursa > 2016-09-21 09:41 | Report Abuse

hm..... must learn more from you...


283 posts

Posted by Peng1185 > 2016-09-21 10:00 | Report Abuse

Icon Sifu Thank you. I enjoy reading ur article and have a much understanding in AA


1,133 posts

Posted by valuelurker > 2016-09-21 10:03 | Report Abuse

Your assumptions for 'aircraft leased from other companies' Sep15 are wrong

Posted by 股海無涯 > 2016-09-21 10:26 | Report Abuse

thx Icon, some extra info wish can help your analysis:
1. base on TA Report and info after investor roadshow, Airasia "might" target inject more aircraft to AAC from current 55 -68 units.
2. base on the Qtr report, AAC latest" total equity" is only 45.9m, With ttl assets 801m and total Debt 755m
3. New appointed CEO, Stéphane Daillencourt, with 30 years exp in GE, manage leasing arm 1700 aircraft portfolio.

base on above info, and the latest p&L and balance sheet, i believe the 1b is viable, how ever, to be realistic, there is 2 possibility:
1. buyer will take 755m debt out of airasia balance sheet with AAC, and paid extra usd 245m, in cash, which mean it will greatly reduce debt and boost AA BS to healthy zone.( jus like tony first bought AA at RM1 and take the 40m debt with it)
2. buyer pay 1b, and AA keep the 755m debt in AA balance sheet, with USD 1b cash, Tony will pay special dividend and cover the private placement of RM 1b.(which i thk with high possibility)

Posted by sahamewah128 > 2016-09-21 10:29 | Report Abuse

Very well written. thank you Icon for the detailed analysis and comparison.


1,192 posts

Posted by MuttonCurry > 2016-09-21 10:30 | Report Abuse

Good Research ... GMT are just small time version of Muddy Waters ...


18,658 posts

Posted by Icon8888 > 2016-09-21 10:39 | Report Abuse

sifu koohaiwuyah, I believe Asia Aviation Capital's net asset is USD45.9 mil + USD185 mil (amount owing to holding company) = USD230.9 mil

Posted by RenegadeMaster > 2016-09-21 10:40 | Report Abuse

Nice one Icon. Great analysis and straightforward presentation for a clueless layman like myself.


18,658 posts

Posted by Icon8888 > 2016-09-21 10:42 | Report Abuse

thank you everybody for your kind comments


3,027 posts

Posted by tkp2 > 2016-09-21 10:47 | Report Abuse

feel even more confident with AA after reading Icon article, yesterday i sailang in Airasia, thanks Icon for this timely article.

Posted by Winningpost > 2016-09-21 11:05 | Report Abuse

Great piece of analysis write-up..for investors decision making.

Posted by 股海無涯 > 2016-09-21 12:05 | Report Abuse

ya, icon sifu, i thk u r right, i overlook this part(amt due to holding company) =D

Tee Tom

167 posts

Posted by Tee Tom > 2016-09-21 12:41 | Report Abuse

Great post. We all are alway waiting for your post and learn from you on how to do a good analysis.


32 posts

Posted by kungfee > 2016-09-21 13:15 | Report Abuse

Thanks for your great effort in preparing the analysis. It's data based and give opinion with well stated assumption.


310 posts

Posted by sato > 2016-09-21 13:46 | Report Abuse

master icon8888, very nice one


21,473 posts

Posted by paperplane2016 > 2016-09-21 14:12 | Report Abuse

Airasia got many debts. too painful if rate hike


28 posts

Posted by steel88 > 2016-09-21 15:27 | Report Abuse

Why no Icon8888 effect on Affin? Can selling q at RM 2.80 absorbed today?


141 posts

Posted by ronnietan > 2016-09-21 16:01 | Report Abuse

I'll add my compliments, Icon8888.
What's your view of a report I read that there won't be US$1.4 bil for distribution after sale of Asia Aviation Capital as it has huge borrowings?
Anyway, I'm in AirAsia for its operating profit, not AAC. That latter's just a bonus.


18,658 posts

Posted by Icon8888 > 2016-09-21 20:21 | Report Abuse

I will be happy if Air Asia pay me 50 sen dividend. Anything more than that is a bonus.


674 posts

Posted by madguy > 2016-09-22 01:03 | Report Abuse

@Icon8888 what does it mean by aircraft leasing unit ?? they selling ?


1,126 posts

Posted by Jay > 2016-09-22 11:17 | Report Abuse

1. May i know what's pass-through revenue?
2. Why do you say lost earnings contribution is not significant? AAC contributed USD19m or RM80 last quarter (ignoring inter-company), Airasia made RM342m in 2Q, RM412m in 1Q excluding forex. but one-off cash boost also good and may bring down interest cost
3. I think technically net assets should still be RM45.9m. Amount owing to holding is debt, not equity. In disposals, this amount should be settled. other than amount owing to holding of RM185m, there's also an amount owing from related parties RM68. so net for AirAsia group AAC owe RM117m. but it's more likely than this amount would have been factored in the USD1b valuation (if it's true)
4. What do you think about its valuation right now? especially considering the new shares to be issued will dilute the eps

Thanks a lot for sharing

Tee Tom

167 posts

Posted by Tee Tom > 2016-09-22 20:09 | Report Abuse

Icon, just assume that Airasia sold the AAC. The item under revenue "Aircraft Operating Lease" (On June16 Qtr 328m), and the item under expenses "Aircraft Operating Lease" (On June16 Qtr -121m) both will disappear, right? That mean quarterly Airasia will lost net income on this item around 200m/qtr right? correct me if mistaken.


18,658 posts

Posted by Icon8888 > 2016-09-22 20:31 | Report Abuse

dear Jay and Tee Tom, I think your questions are valid. My argument that disposal of AAC will not affect Air Asia profitability in a big way was based on AAC figures. However, upon taking a closer look at Air Asia's financial figures, the lease income and lease expense is much higher than that of AAC. One possibility is that only part of Air Asia's leasing activities are housed under AAC. Due to lack of information, I think it is best that I don't take a stance when come to this issue. I have added a paragraph in item (d) of Concluding Remarks to say that I no more comfortable with my original view.

Tee Tom

167 posts

Posted by Tee Tom > 2016-09-22 21:49 | Report Abuse

Icon, I have no mean to question on your hard effort piece of work. Haha, I think you spent a lot of time & effort to produce this top class analysis. Anyway, no discuss, no debate, it wont has spark. This is just a normal processes we are going. The more important is the ending, right? You are my top example I want to learn on; Your analysis ability, your fugures sensitivity, your top class sense of investing, and your ability to put your thought on the paper. I always enjoy your writing. Thank god you are always by our side. Thanks.


18,658 posts

Posted by Icon8888 > 2016-09-22 22:02 | Report Abuse

Oh no offence taken. You guys gave your comments in a professional way, I have no complain

By the way, I finished that article at almost 1am at night. So the last few items were not as well thought out and written as I wish (sleepy...). So I welcome you guys comments to point out any inadequacy.


21,473 posts

Posted by paperplane2016 > 2016-09-23 22:19 | Report Abuse

Talk so much for what?
AirAsia sudah 100%, buy others, kesm, gkent, rcecap, bornoil,choobee,etc


761 posts

Posted by Blacksails > 2016-09-23 23:03 | Report Abuse

RCECap buy call by Maybank TP 1.60 , Airasia TP 3.33 Buy call by Maybank, TP
3.85 Buy call by HLG.

Posted by Ban Seng Jong > 2016-09-29 23:12 | Report Abuse

nice writeout. learning a lot from you Icon!

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