Malaysia's AirAsia kept at 'buy', target price 2.18 rgt
Tags :
Southeast Asia,
AirAsia
KUALA LUMPUR (XFN-ASIA) - HLG Securities said it has maintained its buy call on AirAsia, with a target price of 2.18 rgt after the budget carrier said it has proposed to hand over rural air services in East Malaysia to Malaysian Airline System Bhd's (MAS) community airline Firefly.
"The proposed handover will have a minimal positive impact on AirAsia, as it will allow AirAsia ...to re-channel back such resources to its existing core short haul budget business operations," said HLG in a note to clients.
It noted Air Asia has, via Fax Asian Xpress Sdn Bhd (FAX), served the 22 turboprop routes in Sabah and Sarawak since August 2006.
The routes were previously handled by MAS, it said.
Meanwhile, HLG said it expects AirAsia to be one of the main beneficiaries of a stronger ringgit.
"The company will register both translation gains and transactional gains," it said, adding that the gains may lift its pretax profit by 14.9 pct on an annualized basis.
Every 1 pct appreciation of the ringgit will lead to another 2.9 pct impact on its pretax profit, it said. At 9.13 am, Airasia was down 0.03 at 1.77.
Date posted: 13-Apr-07
Other AirAsia News |
Malaysia's AirAsia kept at 'buy', target price 2.18 rgt 
