AirAsia’s operational numbers in 3QFY18 remained rather resilient in the wake of the volatility in fuel price.
KUCHING: Analysts are remaining positive on AirAsia Group Bhd’s (AirAsia) outlook on the back of the group’s resilient third quarter of financial year 2018 (3QFY18) operating statistics.
According to the research arm of MIDF Amanah Investment Bank Bhd (MIDF Research), AirAsia’s operational numbers in 3QFY18 remained rather resilient in the wake of the volatility in fuel price.
MIDF Research also noted that the group’s load factor continues to be healthy supported by the continuous rise in revenue passenger kilometres (RPK).
As per the group’s press release on 3QFY18 preliminary operating statistics, AirAsia Consolidated aircraft operating certificates (AOCs) posted a load factor of 82 per cent year-on-year, down five percentage points as a result of significant capacity increase and 10 per cent available seat kilometres (ASK) growth in order for AirAsia to continuously grow its market share and to meet travel demands.
“Given these stable indicators, our positive outlook on the group stays intact on its compelling growth story, stable operations with added capacity and continuous improvement to derive higher values per kilometre flown,” the research arm said.
“In addition, we believe its integrated efforts to monetize its assets, via digitalisation is strategic, as it takes advantage of its passengers’ database to enhance customer experience and improve ancillary incomes.”
All things considered, MIDF Research maintained its ‘buy’ recommendation with an unchanged target price of RM3.62 per share.
Meanwhile, the research arm of Public Investment Bank Bhd (PublicInvest Research) maintained its ‘outperform’ call on AirAsia, with a target price of RM4.14 per share, pegged on 13-fold FY19F earnings per share (EPS).
“The share price has weakened significantly due to concerns on higher fuel price and weakening ringgit, but we believe the selldown is overdone,” PublicInvest Research said.
The research arm saw the current weakness as an opportunity to accumulate, as the stock currently trades at only six-fold FY18F price earnings ratio (PER).
“In addition, we expect a special dividend from the divestment of its aircraft leasing business will be announced in the fourth quarter of 2018 (4Q18).”