CIMB IB Research lowers target price for AirAsia to RM3.52

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KUALA LUMPUR (July 19): CIMB IB Research has maintained its “Hold” rating on AirAsia Group Bhd (AAGB) at RM2.31 with a lower target price of RM3.52 (from RM3.63) and said higher oil prices and the weaker ringgit offset benefits from the benign competitive environment in Malaysia.

In a note yesterday, the research house said its target price has been reduced as the shares traded ex-dividend from June 12, with the 12 sen DPS from the sale of GTR to SATS paid on 13 July.

“We valued AAGB’s core business at 12x CY19F P/E (worth RM2.66/share), and added 86 sen /share in special dividends from the sale of its leasing business and AAE Travel.

“Separately, we note that the potential introduction of airfare price caps should not impact AirAsia significantly, as we expect the price cap to be set quite high,” it said.