HLIB Research downgrades AirAsia, lowers target price to RM3.20

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KUALA LUMPUR (Feb 28): Hong Leong IB Research has downgraded AirAsia Group Bhd to “Hold” at RM3.04 with a lower target price (TP) of RM3.20 (from RM3.65) and said AirAsia reported FY18 core PATMI of RM705.2 million (-52.3% y-o-y), below HLIB forecast and consensus, following a disappointing 4Q18.

In a note today, the research house said AirAsia’s FY18 was affected by higher operational costs (jet fuel, maintenance, lease charges and user fees).

“Management will remain aggressive in its capacity expansion plan with additional 22 aircrafts in 2019 while focusing on cost cutting measures.

“Declared a second interim dividend of 12 sen/share (total 64 sen/share for FY18).

“Downgrade to Hold with lower TP: RM3.20 (from RM3.65), based on 10% discount to SOP of RM3.55 post earnings downward adjustments,” it said.