AirAsia Bhd posted net profit of RM554.20mil in the fourth quarter ended Dec 31, 2015 compared with a net loss of RM428.51mil a year ago, boosting the full year FY15 earnings to RM540.96mil.
"Meanwhile, Cebu Air delivered 1Q16 core net profit growth of 56% on-year, on the back of an 8 percentage point on-year rise in loads as domestic demand was strong in the run-up to the elections. AAP similarly saw a 9.9 percentage point rise in loads, and yields may also be up on-year.
“Coming from a low level, AirAsia has seen very strong price action lately, rising 71%over the past three months and 10% over the past one month. There could be more room to rise if it delivers the strong results we expect it to.
“AirAsia remains one of the cheapest low-cost carrier stocks from a price-to-earnings (P/E) perspective, trading at a core CY16 P/E of 6 times against the average sector P/E of 11 times. We expect the 2Q results to be good as well, as industry capacity is flattish while inbound Chinese tourist traffic is rising.
“We need to monitor Malindo’s capacity expansion in 2H16, as it has kept its fleet size unchanged so far this year despite earlier planning for a six to 10 aircraft addition in 2016,” it said.
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