AirAsia X descends after co says 3Q net loss at RM43m

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KUALA LUMPUR (Nov 24): AirAsia X Bhd fell as much as three sen or 8% to 35 sen after the budget airline said it posted a net loss at RM43.3 million in the third quarter ended September 30, 2017 (3QFY17) versus a net profit of RM11.03 million a year earlier.

AirAsia X shares cut losses at 35.5 sen at 9:37am with some 26 million units traded to become Bursa Malaysia's most-active stock. Yesterday, AirAsia X told Bursa Malaysia that its 9MFY17 net profit fell to RM14.47 million from RM191.53 million a year earlier.

Today, CIMB Investment Bank Bhd analyst Raymond Yap wrote in a note that AirAsia X's 9MFY17 core net loss at RM3 million was better than expected.

"AAX’s (AirAsia X) 9MFY17 core net loss of RM3 million was better than expected due to stronger-than-forecast yields, but underperformed consensus’s full-year profit forecast of RM153 million. As the seasonally-strong 4QFY17F alone could single-handedly deliver more than RM100 million in core profits, we raise our FY17F core net profit forecast to RM105 million.

"We raise our target price to RM0.28, still based on 1x P/BV, but rolling forward to end CY18. We maintain reduce as AAX’s valuations remain unattractive, in our view. With a low single-digit core airline net profit margin, earnings risks remain high," Yap said.