AirAsia, AAX shares fall despite analysts' positive views on prospects

AirAsia, AAX shares fall despite analysts' positive views on prospects
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KUALA LUMPUR (Feb 16): The share prices of AirAsia Bhd and AirAsia X Bhd (AAX) fell after the latter showed a decline in passenger numbers.

This is despite analysts remaining positive on the low-cost carriers' outlook.

At 11:50am, AirAsia dropped two sen or 1.47% to RM1.34. AAX, which was among the top tenth actively traded counters this morning, also fell 2% or 0.5 sen to 24.5 sen, with 21.41 million shares traded.

AirAsia released its operating statistics in the fourth quarter ended Dec 31, 2015 (4QFY15) yesterday, which saw a 15% year-on-year (y-o-y) growth in traffic volume to 15.98 billion revenue-passenger-kilometres (RPKs), and load factor increased by five percentage points y-o-y to 83%.

However, its associate AAX's RPK in the quarter decreased by 8% to RM4.9 billion, while its load factor increased by two percentage points y-o-y to 83%.

The groups are expected to announce their results and passenger yield data in 4QFY15 next week.

MIDF research expects that AirAsia's FY15 results could surprise on the upside due to higher average fares and yields as a result of better pricing by competitors, and good operating numbers.

MIDF is also expecting better operating figures due to lower operating expenses arising from savings from lower jet fuel prices, which averaged at US$56 per barrel (bbl) in 4QFY15 (-54% y-o-y), offsetting the increase in expenses resulting from higher USD/MYR which averaged at 4.28 in 4QFY15 (+27%).

Pending on the group results release, MIDF maintained "buy" on the counter with a target price (TP) of RM1.82.

"We like AirAsia as it is a beneficiary of lower jet fuel prices with lower hedges in FY16 of US$60/bbl, compared with US$88/bbl for FY15," it said.

Meanwhile, Public InvestResearch maintained its "outperform" call on AirAsia with a TP of RM1.88.

It highlighted that, at current share price, AirAsia is trading at 6.2 times its FY16 forecast earnings, which is below its four-year average price-earnings-ratio.