MORNING CALL:30/8/23

Maybank thinks AAX is poised to fly higher, faster, stronger

Transcript

00:00 This midweek, we take off with mid-haul budget carrier AirAsia X, which has seen its numbers

00:06 recover as borders reopen.

00:09 Maybank IB already has a buy call on the airline but tweaked its target price lower from RM3.58

00:14 to RM3.01.

00:16 First half Cornet profit of RM8.7 million was actually below Maybank's expectations.

00:22 But the six-month revenue for the same period of RM1.06 billion was actually above its expectations

00:28 in that respect.

00:29 Profits came in below expectations due to higher-than-expected expenses, one of which

00:34 was higher-than-expected aircraft leasing expenses of just over RM28 million.

00:39 That being said, Maybank is still expecting the second half to be a lot stronger on seasonally

00:44 higher demand and fares coupled with sequentially lower expenses.

00:48 After taking into account more passengers in FY23, higher average user charges and higher

00:54 aircraft leasing expenses, Maybank IB actually cut its FY23, 24 and 25 EPS by 16, 29 and

01:02 26 percent.

01:04 Though Maybank concedes that the second quarter was disappointing, there is still upside from

01:08 AAX having its PN17 classification lifted and contributions from Thai AirAsia X.

01:14 So only Maybank covers AAX according to Bloomberg.

01:17 So while it did lower its target price at the new one, it still implies a possible upside

01:22 of around 34 percent from what it is trading now.

01:25 Thanks for watching.