Page 1 of 21 Fundamental Analysis for AIRASIA BERHAD Fundamental Analysis: 68% B Company Name: Board: Stock Code (Bursa): FBMKLCI: FALSE Bloomberg: Reuters: AIRA.KL Industry: Stock Grade: Sub-Sector: Company Description: Date of Analysis: Price: 3.34 Income Statement Analysis (2010): Balance Sheet Analysis (2010): Income Statement Analysis (Jun-11): Balance Sheet Analysis (Jun-11): Main Board AIRASIA BERHAD AIRASIA AIRA:MK TRADING SERVICES Although debt as a percent of total capital decreased at AirAsia Bhd over the last fiscal year to 68.91%, it is still in- line with the Airlines industry's norm. Additionally, there are enough liquid assets to satisfy current obligations. Accounts Receivable are among the industry's worst with 7.94 days worth of sales outstanding. This implies that revenues are not being collected in an efficient manner. Last, AirAsia Bhd is among the least efficient in its industry at managing inventories, with 3.32 days of its Cost of Goods Sold tied up in Inventories. AIRLINE / AIRPORT SVCES AND AVIATION EQPMT Year over year, AirAsia Bhd has been able to grow revenues from 3.1B to 3.9B. Most impressively, the company has been able to reduce the percentage of sales devoted to cost of goods sold, SGA expenses and income tax expenses. All of these improvements led to a bottom line growth from 506.3M to 1.1B. Since AirAsia introduced its low fare, no frills concept in December 2001, the airline now flies to over 48 destinations in Malaysia, Thailand, Indonesia, Macau, China, Investment Grade Compared to the same quarter last year, AirAsia Bhd has been seen their bottom line shrink from 198.9M to 104.3M despite an increase in revenues from 933.4M to 1.1B. An increase in the percentage of sales devoted to income tax expenses from -5.86% to 3.79% was a key component in the falling bottom line in the face of rising revenues. This company's capital structure relies on a level of debt that is comparable to the Airlines industry's norm, at 67.81%, which represents a decrease from the prior fiscal year. Additionally, there are enough liquid assets to satisfy current obligations. Accounts Receivable are among the industry's worst with 7.40 days worth of sales outstanding. This implies that revenues are not being collected in an efficient manner. Last, AirAsia Bhd is among the least efficient in its industry at managing inventories, with 2.45 days of its Cost of Goods Sold tied up in Inventories. 29-Aug-11
21
Embed
Fundamental Analysis for AIRASIA BERHAD · PDF file8/29/2011 · Page 1 of 21 Fundamental Analysis for AIRASIA BERHAD Fundamental Analysis: 68% B Company Name: Board: Stock Code...
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
Page 1 of 21
Fundamental Analysis for AIRASIA BERHAD
Fundamental Analysis: 68% BCompany Name: Board:
Stock Code (Bursa): FBMKLCI: FALSE
Bloomberg: Reuters: AIRA.KL
Industry: Stock Grade:
Sub-Sector:
Company Description:
Date of Analysis: Price: 3.34
Income Statement Analysis (2010):
Balance Sheet Analysis (2010):
Income Statement Analysis (Jun-11):
Balance Sheet Analysis (Jun-11):
Main BoardAIRASIA BERHAD
AIRASIA
AIRA:MK
TRADING SERVICES
Although debt as a percent of total capital decreased at AirAsia Bhd over the last fiscal year to 68.91%, it is still in-
line with the Airlines industry's norm. Additionally, there are enough liquid assets to satisfy current obligations.
Accounts Receivable are among the industry's worst with 7.94 days worth of sales outstanding. This implies that
revenues are not being collected in an efficient manner. Last, AirAsia Bhd is among the least efficient in its
industry at managing inventories, with 3.32 days of its Cost of Goods Sold tied up in Inventories.
AIRLINE / AIRPORT SVCES AND AVIATION EQPMT
Year over year, AirAsia Bhd has been able to grow revenues from 3.1B to 3.9B. Most impressively, the company
has been able to reduce the percentage of sales devoted to cost of goods sold, SGA expenses and income tax
expenses. All of these improvements led to a bottom line growth from 506.3M to 1.1B.
Since AirAsia introduced its low fare, no frills concept in December 2001, the airline
now flies to over 48 destinations in Malaysia, Thailand, Indonesia, Macau, China,
Investment Grade
Compared to the same quarter last year, AirAsia Bhd has been seen their bottom line shrink from 198.9M to
104.3M despite an increase in revenues from 933.4M to 1.1B. An increase in the percentage of sales devoted to
income tax expenses from -5.86% to 3.79% was a key component in the falling bottom line in the face of rising
revenues.
This company's capital structure relies on a level of debt that is comparable to the Airlines industry's norm, at
67.81%, which represents a decrease from the prior fiscal year. Additionally, there are enough liquid assets to
satisfy current obligations. Accounts Receivable are among the industry's worst with 7.40 days worth of sales
outstanding. This implies that revenues are not being collected in an efficient manner. Last, AirAsia Bhd is among
the least efficient in its industry at managing inventories, with 2.45 days of its Cost of Goods Sold tied up in
Inventories.
29-Aug-11
Page 2 of 21
Shareholding Analysis:
TUNE AIR SDN BHD is the major shareholder. EMPLOYEES PROVIDENT FUND BOARD is holding 6.14%.
Score Card - Fundamental Analysis
W R S
4 9 36
3 9 27
5 9 45
4 5 20
5 2 10
5 2 10
3 10 30
4 10 40
4 10 40
4 10 40
4 5 20
4 8 32
3 5 15
3 4 12
4 4 16
3 9 27
3 7 21
3 10 30
3 3 9
3 10 30
68%Overall Score
2.1. Strong brand, monopoly or barriers to entry
2.2. Gross Profit Margin (> 40%) & Net Profit
Margin (> 10%)
4.1. Working capital increase slower than sales
4.2. Short & declining "Cash Conversion Cycle"
4.3. Free Cash Flow / Sales > 5%
2.3. Consistently high ROE > 15%
5 - Management and Institutional Investors are Holding/Buying Stock
3.3. Current Ratio > 1
2.5. ROIC > 15%
3 - Conservative Debt
5.1. Management and Institutional Investors are
Holding/Buying Stock
3.2. Debt/Equity Ratio < 1
2.4. Able to deliver double-digit growth in next 3-