Hot Stock AirAsia soars 8% despite privatisation talk denial as valuation looks attractive

by **Cals** Mon 12 Oct 2015, 20:55

Hot Stock

AirAsia soars 8% despite privatisation talk denial as valuation looks attractive

By Kamarul Anwar / theedgemarkets.com | October 12, 2015 : 4:17 PM MYT

KUALA LUMPUR (Oct 12): Market talk on AirAsia Bhd ([You must be registered and logged in to see this image.] Valuation: 1.20, Fundamental: 0.20) as a privatisation target amid cheap valuations supported the stock's ascendancy to the top of most-active chart on Bursa Malaysia today.
Budget airline AirAsia shares were valued as high as RM1.41. At 3:41 pm, AirAsia pared gains at RM1.40, with some 70 million shares traded.
A dealer contacted by theedgemarkets.com said The Edge Malaysia's business and investment weekly's (Edge Weekly) report on AirAsia this week, highlighted how undervalued the airline was.
Edge Weekly highlighted that even with a 30% premium to AirAsia's last Friday’s closing share price of RM1.31, the stock would still be a steal for AirAsia's founders and major shareholders, Tan Sri Tony Fernandes and Datuk Kamarudin Meranun.
The dealer said Edge Weekly's report could have catalysed the market to capitalise on a possible privatisation. This was despite AirAsia saying it had “no knowledge of privatisation” by Fernandes and Kamarudin.

The dealer said: “People are just taking a gamble with AirAsia in response to the (report on Edge Weekly), since it’s already cheap anyway. Even then (if the privatisation did not happen), the market seems to be taking a position, because there is less downside than there is more upside."
AirAsia's current share prices compared with the company's latest reported net assets per share at RM1.71.
Over the last one year, AirAsia had traded at an intraday high of RM2.90 on Dec 26, 2014; before descending to a low at 76.5 sen on Aug 26, 2015.
(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)