I love to see emotional people like you in the markets because when one is emotional, their trading is being disrupted by their emotion which causes them to make irrational moves often buying overvalued companies thinking that it would drift higher when it should be crashing. good luck, always love dullard like you and Jaya to be on the opposite of the trade to add liquidity to the market.
"KUALA LUMPUR (April 16): AirAsia Group Bhd chief executive officer Tan Sri Tony Fernandes has confirmed that the group is disposing of 25 aircraft to US-based global private investment firm Castlelake LP for US$768 million (RM3.2 billion) after obtaining its shareholders' approval....
"Selling our aircraft monetises all our aircraft at high prices and avoids residual risk and allows us to return cash to shareholders and invest in our new digital business," said Fernandes."
Yo DickyMe, where have you been man ? be careful bro, if you post any negative news BJ would come out and attack you. BJ as in Betkaukau and Jaya if you aren't aware of.
The news trend is that BJ isn't using their present account and are operating with their FAKE accounts to trash anyone who provides factual facts about AA.
As I said before, even if this QR is positive, TF can't be consistent and you can start counting to the next bad QR. His just trying to report revenues by selling assets but what can he sell later when there's no more assets ? Lol
Just out of curiosity, are you holding any counters from the KLSE to begin with ?
Have been loading up on 4 to 5 counters due to its attractive valuations for my fund but definitely AA isn't one of those that I'm holding for the long term.
When buy new plane 5 years ago....at 100, depreciation over 5 years....each year 20 depreciation expense.....now residue value is nil. If able to sell at 25 now....that is capital gain. (Pls dont whack me here....figures are only as example).
Yes, some may say new plane will incur additional cost such as depreciation and financing cost. But then the plane bought 5 years ago also incur the same financing and depreciation cost. So basically, common cost for both old and new plane.
When AA sell the old plane, they save on future maintenance fee as new plane should have lesser maintenance problem and more fuel efficient. The capital gain of 25 mentioned earlier....maybe 5 is for downpayment for new plane and 15 pay out as SD...balance as cash reserve for other project that the company is undertaking.
If all factor such as number of customer and fare remain constant and does not go down, investor may be looking at higher profit in the future because of lower fuel usage and lower maintenance cost of new plane.
In theory, AA share price should be going up. At the current price of RM2.50+...its undervalued. Should be around the RM3 range.
Reporting revenues by selling financial assets, we can see that in financial reporting, let's wait and see.
If you buy new aircraft as Airasia did previously in bulk you can negotiate for group discount below market rates prices, when you sell used planes to leasing co. it should be at market rates. Overall impact is described clearly in AirAsia financial report on deal, which analyst at msci and bnp-paribas have factored in, plus other analyst.
Also selling old aircraft to make way for more fuel efficient Airbus 330 neo, coming in second half 2019 makes sense inventory turnover.
Using old plane or new plane, the company would still be expose to fuel price risk and FX risk. Ability to hedge that or not is a separate matter. So far the company had been able to contain or mitigate the risk exposure. Risk is something that no company can eliminate but can only mitigate or reduce it.
Despite differing views from others, i still think AA selling their old planes and getting new ones is a very wise move. It bring up the Asset value of the company, cash out from old asset, pay out SD to make shareholders happy, boost confident in the market about the company, etc.
IMHO, price of RM2.50 - RM2.70 is undervalue and should be a good price to buy in. Anything above 2.75 - RM3 would more or less be the actual value of the company and if price go higher than that would be at a premium. Pls note that this opinion is only valid base on its current performance and track record. If there are any changes in irs risk structure, world economic conditions (upon outcome of the current US-China fiasco), things may change.
So MK4872, your opening statement is already a flaw, a companies cost would definitely affect a firms profitability. Do you think it wouldn't ? Let's illustrate this as an example, do you want a firm that has a revenue of RM1 and a Net Profit of RM0.30 or do you want another company with a Revenue of RM1 but with a variable cost that ranges from RM0.90-0.99 ?
Secondly, AA has never been able to contain nor mitigate their exposure. If you go back far back to my previous comments you would know what I mean.
Thirdly, I however agree with your statement which says this "Risk is something that no company can eliminate but can only mitigate or reduce it".
Fourthly, cashing out from old assets may be a good idea if there are newer assets that increases efficiency etc but sadly selling from the right hand and giving it to the left hand won't last for long.
Finally, you are just judging from this and valued AA to be around 2.75 to 3 just on the above mentioned ?
Good luck bro, that's just like picking up random numbers from the sky Just like how Jaya did.
Btw, lovely to see many new account which were created recently and only. have been posting in AA. Great job to the master account. Could really foresee that if the QR which would be released soon is good, these new accounts would go on a rampage mode while promoting AA non stop till the next QR by twisting more, spinning more and brining in inflated valuations.
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Jaya
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Posted by Jaya > 2019-05-28 09:24 | Report Abuse
Fine and all looking good
Portfolio also looking very good