AirAsia market cap soars above RM11b

KUALA LUMPUR: AirAsia Bhd's market capitalisation (market cap) surpassed the RM11 billion mark for the first time, as the stock closed at a new high yesterday.

The stock closed at RM3.99 yesterday, after surging to an intraday high of RM4.06 a share. More than 8.5 million shares were traded.

The end price was the highest close on record for Asia's biggest budget carrier, which also helped the company's market cap surge to the RM11.08 billion level.

At RM11.08 billion, AirAsia is believed to be the 28th largest company based on market cap on the Malaysian stock exchange.

Over the past 30 trading days, its stocks have appreciated by 27 per cent and so far this year, AirAsia shares have climbed 58 per cent.

The stock surge also came on the same day when UOB KayHian lifted its target price on the budget carrier from RM3.70 to RM4.60.

The research house also kept its "buy" call on the stocks despite expecting a lower second quarter net profit.

The house adds that it does not expect results to drive stock price higher, but highlighted that the company is still the best low-cost carrier stock in the region.

"A scarcity premium is not reflected in its valuation or for the fact that it is fast expanding and gaining market share at the expense of full-service carriers," UOB KayHian said in its note.

It added that the stock's 8 times enterprise value/ebitda multiple is not excessive.

UOB KayHian is one of the 17 research houses that recommended a "buy" call on the stock. Eight research houses recommend investors "hold" the stock, while another two research houses recommend investors "sell" the stock.

According to Bloomberg data, Macquarie, Deutsche Bank, TA Securities and CIMB were among the 17 research houses that are optimistic about AirAsia, expecting its share price to surge to RM4.80, RM5.00 and RM4.70 respectively.