KUALA LUMPUR (May 27): AirAsia Bhd jumped as much as 27 sen or 13%, after reporting a 488% rise in first quarter net profit from a year earlier.

Shares of budget airline AirAsia reached their highest so far today at RM2.39 at 12:30pm, for a market capitalisation of RM6.64 billion.

About 54 million shares were traded, making AirAsia, Bursa Malaysia's most active counter and third-largest gainer.

Yesterday (May 26), AirAsia said net profit rose to RM877.79 million in the first quarter ended March 31, 2016 (1QFY16), from RM149.33 million. Revenue was higher at RM1.7 billion, compared to RM1.3 billion.

Today, CIMB Investment Bank Bhd maintained its AirAsia share target price at RM3.13, with an “add” rating.

In a note today, CIMB analyst Raymond Yap said the research firm maintained its forecast for AirAsia’s core net profit at RM1.3 billion, which was three times the RM429 million core earnings in 1QFY16.

"We have opted for a more conservative forecast as record airline profits may encourage additional capacity deployment by Malindo, which has so far not taken any additional aircraft this year; and also by Thai Lion Air, which slowed down the pace of its fleet additions recently.

“The AirAsia group is 75% hedged for the remaining quarters of FY16 at an average jet fuel strike price of US$54 per barrel. AirAsia will not be taking further hedges for this year, but has opted to extend its hedges into next year, currently at 30% of 1QFY17’s and 20% of 2QFY17’s requirements with an average strike of
US$57 to US$58 per bbl [barrel]. This position will be built up further and will give AirAsia, excellent cost protection at record low oil prices,” he said.