Speaking to CNBC’s The Rundown, Ahmad Maghfur Usman, Asean transport and logistics analyst at Nomura, said he would maintain his “buy” rating on AirAsia with a target price of RM3.72 ringgit per share. The company’s shares were trading at around RM3.13 ringgit on Friday morning.
His upbeat analysis came shortly before AirAsia Group CEO Tony Fernandes told CNBC’s “Squawk Box” he was confident about earnings in the coming quarters despite the low-cost carrier registering a 30% fall in its first quarter net profits.
According to CNBC, Ahmad Maghfur said, “I wouldn’t say the results were disappointing … AirAsia actually displayed the best results among all the listed carriers that I cover in Asean, that’s why I’m still very positive on the stock and moving forward, there are cost saving initiatives that they have planned for so this should bode well for the upcoming quarters.”
A key profit driver for the group, Ahmad Maghfur said, was AirAsia’s long haul flights to Hawaii launching next month.
In his interview, Fernandes said he was confident that the company would deliver a better report card in the coming quarters.
“We’re seeing a much better environment. Some of our competitors are cutting costs, they’re raising fares,” he said.
“We’re also driven by very good results in the Philippines and Indonesia, these were two laggards for us before … and India is doing much better than expected so all the guns are moving in the right direction.”
On Thursday, AirAsia reported that its net profit for the first quarter fell to RM615.8 million ringgit from a year ago, and revenues rose 31% to RM2.2 billion.