MayBank Research Airasia
PP16832/01/2013 (031128)
Malaysia
Initiating Coverage
10 September 2013
AirAsia X
Buy (new)
King Of Low-Cost, Long-Haul
Share price:
Target price:
MYR1.05
MYR1.30 (new)
High growth potential. AirAsia X is an excellent exposure to the low cost, long-haul (LCLH) industry which is enjoying breakneck growth rate and outdoing the general aviation market growth of 5.0% by a factor of
2-3x. The LCLH segment is relatively more defensive compared to full service carriers (FSC), as more people switch to budget travel during times of economic downturn to save cost. We initiate coverage with a
BUY call, with a target price of MYR1.30/share based on 15x FY14
PER, which is the upper band of the typical aviation multiple of between
8-15x to factor in AAX’s strong growth potential.
Mohshin Aziz mohshin.aziz@maybank-ib.com (603) 2297 8692
Stock Information
Description: Long haul, low cost carrier based in Malaysia with services to various Asian and Australian destinations
AAX MK
2,370.4
2,488.9
3.68
1,747.03
34.1
Ticker:
Shares Issued (m):
Market Cap (MYR m):
3-mth Avg Daily Turnover (USD m):
KLCI:
Free float (%):
%
34.5
13.8
6.4
6.4
Major Shareholders:
AERO VENTURES SDN BH
AIRASIA BHD
ORIX AIRLINE HLDS LT
MANARA MALAYSIA I LT
Purist low-cost, long-haul model. We note that AirAsia X’s (“AAX”) business model is a purist LCLH airline with high aircraft seat density, high utilisation rate and the unbundling of frills. AAX is the longest surviving LCLH airline in the world, which has conferred it with considerable knowledge and experience. Its leadership status will ensure that it is in the best position relative to its rivals.
The AirAsia connection. AAX’s partnership with AirAsia Berhad has enabled it to have all the hallmarks of a big established airline, whilst retaining all the benefits of a small organization. This has helped AAX to be the lowest reported unit cost airline in the world, with superior aircraft utilization rate and operational reliability. This
Malaysia
Initiating Coverage
10 September 2013
AirAsia X
Buy (new)
King Of Low-Cost, Long-Haul
Share price:
Target price:
MYR1.05
MYR1.30 (new)
High growth potential. AirAsia X is an excellent exposure to the low cost, long-haul (LCLH) industry which is enjoying breakneck growth rate and outdoing the general aviation market growth of 5.0% by a factor of
2-3x. The LCLH segment is relatively more defensive compared to full service carriers (FSC), as more people switch to budget travel during times of economic downturn to save cost. We initiate coverage with a
BUY call, with a target price of MYR1.30/share based on 15x FY14
PER, which is the upper band of the typical aviation multiple of between
8-15x to factor in AAX’s strong growth potential.
Mohshin Aziz mohshin.aziz@maybank-ib.com (603) 2297 8692
Stock Information
Description: Long haul, low cost carrier based in Malaysia with services to various Asian and Australian destinations
AAX MK
2,370.4
2,488.9
3.68
1,747.03
34.1
Ticker:
Shares Issued (m):
Market Cap (MYR m):
3-mth Avg Daily Turnover (USD m):
KLCI:
Free float (%):
%
34.5
13.8
6.4
6.4
Major Shareholders:
AERO VENTURES SDN BH
AIRASIA BHD
ORIX AIRLINE HLDS LT
MANARA MALAYSIA I LT
Purist low-cost, long-haul model. We note that AirAsia X’s (“AAX”) business model is a purist LCLH airline with high aircraft seat density, high utilisation rate and the unbundling of frills. AAX is the longest surviving LCLH airline in the world, which has conferred it with considerable knowledge and experience. Its leadership status will ensure that it is in the best position relative to its rivals.
The AirAsia connection. AAX’s partnership with AirAsia Berhad has enabled it to have all the hallmarks of a big established airline, whilst retaining all the benefits of a small organization. This has helped AAX to be the lowest reported unit cost airline in the world, with superior aircraft utilization rate and operational reliability. This