CIMB Research maintains Outperform on AirAsia, TP RM4.20

by **hlk** Fri 24 Jun 2011, 11:06

KUALA LUMPUR: CIMB Equities Research said AirAsia announced a widely-expected order for 200 A320neo aircraft at the Paris Air Show on Thursday, June 23 for delivery starting 2016.

“The orders are a positive development as the aircraft will be 15% more fuel efficient than the existing A320,” it said on Friday.

CIMB Research said AirAsia will not overstretch its balance sheet as its Thai and Indonesian associates should be able to take these planes in their own names post listing and AirAsia has the option to dispose of the older model.

The new planes are also needed to grow its Philippines and future Vietnam operations.

“We maintain our forecasts, RM4.20 target price (9x P/E) and OUTPERFORM rating as AirAsia’s low operating costs and strong demand put it in the best position to ride out high oil prices and global overcapacity. A potential catalyst is the listing of its two associates,” it said.