AirAsia X most active, gains 7% on institutional buying

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KUALA LUMPUR (May 25): AirAsia X Bhd, the bourse's most-actively traded stock, surged as much as 7% on institutional buying. This came ahead of its first quarter financials announcement this Wednesday (May 27).

Today, AirAsia X (fundamental: N/A; valuation: N/A)  rose as much as two sen to 29 sen before paring gains at afternoon market break. At 12:30pm, the stock settled at 28 sen with some 53 million shares traded.

The stock remained at 28 sen at 2.57pm. "There is a buying signal from institutional funds since last Friday," a dealer told theedgemarkets over the phone today.

He said instutional buyers had acquired AirAsia X shares as retail investors sold their units in the airline. "I believe the trend will continue for the next couple of days," he said.

AirAsia X's financials have weakened. In financial year ended December 31, 2014, the company's net loss widened to RM519.35 million from a net loss of RM88.27 million a year earlier. Revenue rose to RM2.94 billion from RM2.31 billion.

The company's latest reported net assets per share stood at 29.4 sen. While there is no price-earnings valuation for loss-making AirAsia X, it is interesting to note that the stock had earlier fallen below its net assets per share.

Last Thursday (May 21), AirAsia X shares fell to a six-month intraday low of 25 sen. This compared to a high of 58.3 sen on December 1, 2014.

Today, analysts are closely watching AirAsia X's financials following announcement of the airline's weaker operating statistics.

In a recent note, Public Investment Bank Bhd said it believed AirAsia X's earnings for the first quarter ended March 31, 2015 (1QFY15) "will still be under pressure.".

"Pending more information from its earnings announcement next week, we believe its 1Q15 earnings will still be under pressure. Nevertheless, we remain positive on the long-term prospects of AAX
(AirAsia X), which will benefit from better capacity management and gradual improvement in yields," Public Investment said.

(Notes: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)