Stock to Review: AirAsia Group Berhad (5099) Current share price 8/7/2020: RM0.705
Principal activities: AirAsia Bhd provides air transportation throughout Asia. The airline operator focuses on delivering lower fares without a host of other amenities. It does not provide frequent-flyer miles or airport lounges, but looks to cater affordable transportation to all customers. In-flight meals and drinks are additional purchases available to customers. All short and long-haul flights are nonstop, and the company focuses on high frequency and high turnaround of flights. Operating segments are grouped by geographic regions. Revenue derived from Malaysia makes up the majority of revenue, but the company does hold material operations in several Asian regions.
Usually I will review the financial position of the Company, however this is an exception because I don't even need to waste time looking at it to analyse this stock.
Financial Performance and Future Earnings
1. If you notice, after paying the "big" dividends the Company had been going downhill? Coincidence or planned? Who will pocket the most from that dividends? Latest quarter till March 2020, EPS is negative (24.10 sen), NTA is RM0.89. This is just for the 0.5 months during MCO ya.
2. So let's say I assume the 3 more quarters is the same losses of negative EPS of (24.10) then it will be loss of another (72.3sen). This calculation is very prudent, during full MCO period got any revenue? :) Btw, since current NTA is RM0.89, so if till year end make another negative EPS of (72.3sen) then I will be left with only RM0.167 sen NTA lol. You understand now why they need to raise right issues RM1 billion? I will tell you only fools will put their money into this rights issue. Can you guess who will subscribe to the rights issue? Using whose money ya?
3. Right now, do you think the next 3 quarters Air Asia will have growth? Can make profit already very good. You can go and find other airline companies see which one doing good? I will assume the whole year is red all the way. My question now to you is, if you know the coming quarters till end of year the Company will make super big losses what do you do? Current share price as per closing today is RM0.705.
Positive Side of Air Asia
I ask myself a few times, I can't seem to find any. So none.
Negative Side of Air Asia
1. Air Asia did not give back refund for bookings during the lockdown period, automatically just give you credit which is useless. This amounts to daylight robbery. Have you wonder where did they learned all these from? Please refer to the following link, apparently they have a "sifu"
2. Credibility of the management due to allegation of "corruption" of kickback.
3. Going concern of Air Asia - Usually when such things comes out even though it's not a qualified opinion, need to really look into it. Sometimes it's already an indication. EY is being too kind to them just by emphasis of matter on material uncertainty. EY did you do your audit properly? Did you assess the credibility of the management in your audit working papers? Did you document down all matters that you need to document down? Else Audit Oversight Board (AOB) will come after you lol. Any self interest threat in terms of audit fees or other fees? I do hope you have done all your audit work and documented it properly, EY. For retail investors, your own "going concern" is more important than Air Asia, please remember that.
Based on the above, I want to remind the users not to fall in love with our Malaysia pride, because although by using their services for travelling and have good memories as a medium of transport for our holidays, we will still need to look at the facts of a particular Company. Many of our national pride had already make a gigantic amount of losses and so many of them have been "bailed" out. This is in the expense of our son, daughter and also future generation. If you're from the middle class, no matter how hard you work, seems that nothing had ever improved. Part of it is because the money is spent on helping rubbish Company like this. The investment banks have been very generous in giving a TP of around RM0.50. I'll just give it a TP of RM0.25 because it is a Company with bad management and lousy performance. I forget to say that AirAsia have its reputation today is because of all Malaysian's who supported it, not the other way round which is their fares is cheap so its as if AirAsia help you. That's why you fall in love with AirAsia and it ripped you apart. I'm telling you by way of your money with them. Since when you can take others people money? When people want refund you need to give it back. It's your right. Malaysians generally are very forgiving due to patriotism. However don't let crooks take advantage of you. The only thing I wish of you is think about it. I rest my case. Read disclaimer.
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