Stock Name: AIRASIA
Company Name: AIRASIA BHD
Research House: CIMB
KUALA LUMPUR: AIRASIA BHD [] fell to an early low of RM2.98 on Wednesday, May 25 after its net profit fell 23.2% to RM171.93 million for the first quarter ended March 31, 2011.
At 10.07am, it was down one sen to RM3.05. There were 1.13 million shares done at prices ranging from RM2.98 to RM3.06.
The low cost carrier reported on Tuesday that its earnings fell from RM224.11 million a year ago as it was affected by rising operational costs. Revenue rose 20.3% to RM1.048 billion from RM870.60 million while earnings per share slipped to 6.2 sen from 9.1 sen.
CIMB Equities Research said 1Q core net profit was 17% of its full-year forecast, which is broadly in line after accounting for seasonality.
It said the airline experienced strong demand, which pushed up load factors, and good ancillary income growth. It also benefited from the weaker-than-expected US dollar.
'Our FY11 reported EPS forecast is largely unchanged but our FY12-13 numbers are reduced by 4%-7% for higher staff costs.
'However, because of the potential listing of two associates which are becoming profitable, we have redefined core EPS to include share of associate profits even though AirAsia does not equity-account them.
'This leads to 17-33% core EPS upgrades, which lift our target price from RM3.40 to RM4.20, still pegged to 9x CY12 P/E. Potential re-rating catalysts include successful 4Q associate IPOs, reduction in gearing and relative resilience to higher fuel prices,' it said.
Company Name: AIRASIA BHD
Research House: CIMB
KUALA LUMPUR: AIRASIA BHD [] fell to an early low of RM2.98 on Wednesday, May 25 after its net profit fell 23.2% to RM171.93 million for the first quarter ended March 31, 2011.
At 10.07am, it was down one sen to RM3.05. There were 1.13 million shares done at prices ranging from RM2.98 to RM3.06.
The low cost carrier reported on Tuesday that its earnings fell from RM224.11 million a year ago as it was affected by rising operational costs. Revenue rose 20.3% to RM1.048 billion from RM870.60 million while earnings per share slipped to 6.2 sen from 9.1 sen.
CIMB Equities Research said 1Q core net profit was 17% of its full-year forecast, which is broadly in line after accounting for seasonality.
It said the airline experienced strong demand, which pushed up load factors, and good ancillary income growth. It also benefited from the weaker-than-expected US dollar.
'Our FY11 reported EPS forecast is largely unchanged but our FY12-13 numbers are reduced by 4%-7% for higher staff costs.
'However, because of the potential listing of two associates which are becoming profitable, we have redefined core EPS to include share of associate profits even though AirAsia does not equity-account them.
'This leads to 17-33% core EPS upgrades, which lift our target price from RM3.40 to RM4.20, still pegged to 9x CY12 P/E. Potential re-rating catalysts include successful 4Q associate IPOs, reduction in gearing and relative resilience to higher fuel prices,' it said.
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