Period 4Q12/12M12
Actual vs. Expectations
FY12 core net profit of RM838m came
in higher than our expectations and the consensus by 10% and 17% respectively.
This was due to a higher other and ancillary income due to the new baggage
charges.
Dividends Surprisingly, AirAsia has declared a special
single tier dividend of 18 sen and final single tier dividend of 6 sen. A 20%
dividend policy was also established commencing FY13.
Key Result Highlights
The FY12 core net profit increased
by only 5% despite of stronger 12% increase in the revenue. This was due to the
higher increase in its fuel cost (+15%), staff cost (+21%) and maintenance and
aircraft related cost (+72%). The significant increase in the maintenance cost was
mainly due to a schedule check-up for the existing fleet.
YoY, with the
seasonally strong period in the 4Q, the core net profit grew by 36% to RM380m. However,
the significant increase was more mainly due to the revision of its baggage charges.
The ticket sales for the period increased marginally only by 3% as compared to
the increase in the ancillary income by 17%.
QoQ, the core net
profit increased by more than one-fold due to the seasonally strong quarter for
AirAsia and the airline industry in general. Both its ticket sales and
ancillary income was up by 14%.
Outlook Malindo’s entry to the Malaysian skies will be
the immediate treat for AirAsia while the risk of a higher fuel cost is still
high in 2013.
Change to Forecasts We have revised our FY13 earnings higher by 5%
as factored in higher ancillary income.
Rating Upgrade to OUTPERFORM.
We have upgraded our
rating on AirAsia to an OUTPERFORM as the share price now offers a c.22% upside
to our target price. We expect the dividend announcement to be welcomed positively
by investors.
Valuation We have revised our target price higher to RM3.23
from RM3.07 based on an unchanged 10.5x PER of its FY13 earnings.
Risks An average jet fuel price above USD130/barrel and
lower than expected margin contraction.
Source: Kenanga
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