TA Research said it is optimistic about Capital A’s 2H23 outlook with stronger fare and greater demand, particularly from China and India.
PETALING JAYA: Capital A Bhd
’s system-wide revenue seat per km (RPK) is expected to grow by 79% to 43 billion in the financial year 2023 (FY23).
If achieved, it would be a huge recovery from 24 billion recorded last year.
Kenanga Research said demand for air travel continues to rise with encouraging load factors recorded at its 159 international routes.
The group reactivated 157 aircraft in the first quarter of 2023 (1Q23) to cater for the growth and targets to have all its 215 aircraft in the air by year-end, it said in a report.
The research house also expected further upside from the current high-yield environment as it anticipated fares to pick up in the second half of 2023 (2H23) and peak in 4Q23.
In 2Q23, fares were 15% higher than pre-Covid levels in 2Q19.
Rising demand for its services will bolster Capital A’s earnings going forward and the company plans to unveil its PN17 regularisation plan by October.
Its 1H23 core net loss narrowed significantly year-on-year to RM112mil, underpinned by the strong recovery in air travel.
Kenanga Research projected Capital A to post a net profit of RM201mil in FY23 and RM229 in FY24.
TA Research said it is optimistic about Capital A’s 2H23 outlook with stronger fare and greater demand, particularly from China and India.
“The group is confident of achieving the consensus forecast for FY23, which is RM242mil in net profit. However, its digital segment is expected to remain loss making,” Kenanga Research said.
The airasia Super App is expected to grow, underpinned by the continued resurgence of travel demand from borders reopening and tactical campaigns, alongside expected growth from airasia Food, Ride and Xpress.
Teleport is expected to continue expanding throughout 2023 as it adds new international lanes and delivery hubs.
BigPay has also launched its digital lending platform to provide new loan products, Kenanga Research said.
The research house has maintained its forecasts and target price of 84 sen a share for Capital A but downgraded its call to “underperform’’ from “market perform’’.
