AIRASIA BERHAD - 4QFY15 Operating Statistics

02/18/16--21:17: 
12-Month Target Price RM1.88

AirAsia released its 4QFY15 operating statistics which saw a 14.6% YoY growth in traffic volume to 15.98bn revenue-passenger-kilometres (RPKs) while load factor increased to 83.2% (+4.7pts YoY). For its Malaysian operations, the number of passengers carried increased by 9.6% YoY to 6.47m in 4QFY15, while load factor increased to 84.8% (+6.5pts YoY). AirAsia’s 4QFY15 results are expected to be released on 26th February 2016. We maintain our Outperform call on AirAsia with target price of RM1.88.

• 4QFY15 performance. The group carried 13.5m passengers (+12.1% YoY) with seat capacity of 16.3m (+5.7% YoY). Available-seat-kilometres (ASK) increased to 19.3bn (+9.3% YoY) and revenue-passenger-kilometres (RPK) increased to 16.0bn (+14.6% YoY) in 4QFY15 due to increase in frequencies and routes. AirAsia’s 4QFY15 results and passenger yield data will only be released next week. 
• Malaysia (MAA) recorded +6.5pts YoY growth in load factor to 84.8% on the back of 6.5m passengers carried (+9.6% YoY), despite a flat growth of 1.2% YoY in seat capacity. Thailand (TAA) remained strong with load factor at 82.4% on the back of passenger volume and capacity growing YoY by 17.2% and 12.5% respectively. Indonesia (IAA) performance was flat YoY with load factor remain at 80%, but slightly improved on QoQ (+4.6pts) despite a capacity reduction of 14.4% YoY and number of passengers declining by 13.9% YoY following its turnaround strategy plan. Philippines’ (PAA) saw a strong YoY growth in passenger and capacity volume of 46.7% and 30.1% respectively. 
• Pending more detail yield data and results for 4QFY15 and full year 2015 next week, we maintain our Outperformcall with unchanged TP of RM1.88, pegging a 10x multiple to the FY16F earnings (20%-discount). At current share price, AirAsia is trading at 6.2x FY16F earnings, which is below its 4-year average PER.
 
Source: PublicInvest Research - 16 Feb 2016