AIRASIA – Fundamental Analysis (3 Mar 2015)

AIRASIA Analysis:-

Excel –

Notes –

My View:-

  • Valuation:
    • Absolute EY% Valuation
      • Trailing:
        • FY14 (EPS: 0.03) – Fair value 0.45 (Fair Value Uncertainty: EXTREME)
        • R4Q (EPS: 0.03) – Fair value 0.46 (Fair Value Uncertainty: EXTREME)
      • Forward:
        • FY15 (EPS: 0.31) – Fair value 4.73 (Fair Value Uncertainty: MEDIUM)
        • FY16 (EPS: 0.347) – Fair value 5.29 (Fair Value Uncertainty: LOW)
      • EPS applied to reach the current stock price (2.43): 0.159
  • Excluding unrealised forex losses, gain on disposal and deferred tax, AirAsia registered 4Q14 core profit of RM41.4m (-59.7%yoy).
  • Now, the main issue is the huge unrealised forex losses. Nevertheless, this is not the first time AIRASIA encountered this issue, and AIRASIA managed to go through this issue because of excellent operational efficiency. Besides, for this time, lower average effective fuel cost in FY15 will cushion this issue.
  • Positives:
    • A more rational market with further yield recovery
    • Capacity management to reduce costs
    • Better ancillary income.
  • Beside huge unrealised forex losses, 1Q15 results could be under par as a result of 60 days blackout on advertising following the QZ8501 incident.
  • Of course, I am worry about AIRASIA, but I believe AIRASIA will be able to go through these issues.

Latest Financial – Q4 2014 Financial Report (26 Feb 2015)

At the time of writing, I owned shares of AIRASIA.


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