Booking.com

Booking.com

Favorite Links

Monday, December 15, 2014

Maybank IB Research maintains Sell on AirAsia X, ups target price to 60 sen

KUALA LUMPUR (Dec 15): Maybank IB Research has maintained its “Sell” rating on AirAsia X Bhd (AAX) at 60 sen with a higher target price of 60 sen (from 57 sen) and said the lower operating cost environment will help AAX to turnaround; we now think it will breakeven in 4Q14.

In a note Monday, the research hosue said AAX was the most sensitive airline to fuel price changes in its airline universe due to its longest average stage length.

Maybank IB said that furthermore, AAX plans to sell some aircraft and the current strong US dollar would enable it to realise attractive values in ringgit term.

“We raise our FY14/FY15/FY16 earnings forecasts by +3.5% / +160.4% / +4.0%.

“Despite the favourable cost parameters, we still think that the business risk is too high with complex execution challenges. We also estimate that AAX will have to raise capital via a rights issue or a private placement within the short term.

“We raise our target price to 60 sen (from 57 sen) on positive earnings revision and base it on an unchanged FY16 P/Book of 1.0x. Take opportunity of the current share price strength and Sell,” it said.

At 11.40am, AAX fell 0.73% or half a sen to 68 sen with 3.48 million shares done.

Source: http://www.theedgemarkets.com/en/node/174899

No comments:

Post a Comment