Is MAS impacting AirAsia share price?
The above 2 charts do tell a story, In the last 3 months Air Asia has seen its share price drop from RM1.40 (highest price on the 2nd April 2008 ) to RM0.86 (lowest price on 20th June 2008 ) a drop of 62% in value. Air Asia’s IPO price was RM1.25 and closed at RM1.40 and (140.1 million shares). At todays prices, AIR AISA is well below it IPO prices while it’s highest recorded price was RM2.14 on Oct 26, 2007.
MAS likewise has seen a decline in share price over the same period from RM4.20 (highest price on 6th May 2008 ) to RM3.18 (lowest price 19th June 2008 ) a drop of 32%. MAS is currently trading at its lowest since the 1st Jan 2007 and in the same period its highest has been RM6.20 on the 27th Feb 2007. However the current price of RM3.18 is still above the level of RM2.2 (i think) when Idris Jala took office.
| Announcement Date |
Financial Yr. End |
Qtr | Period End | Revenue RM ‘000 |
Profit/Lost RM’000 |
EPS | Amended | ||||||
| 29-May-08 | 31-Dec-07 | Other | 31-Mar-08 | 535,156 | 161,277 | 6.80 | - | ||||||
| 27-Feb-08 | 31-Dec-07 | Other | 31-Dec-07 | 632,792 | 245,723 | 10.40 | - | ||||||
| 23-Nov-07 | 31-Dec-07 | 1 | 30-Sep-07 | 461,585 | 179,977 | 7.70 | - | ||||||
| 30-Aug-07 | 30-Jun-07 | 4 | 30-Jun-07 | 432,154 | 185,050 | 7.90 | - | ||||||
| Announcement Date |
Financial Yr. End |
Qtr | Period End | Revenue RM ‘000 |
Profit/Lost RM’000 |
EPS | Amended | ||||||
| 20-May-08 | 31-Dec-08 | 1 | 31-Mar-08 | 3,752,918 | 120,530 | 7.19 | - | ||||||
| 02-Apr-08 | 31-Dec-07 | 4 | 31-Dec-07 | 4,072,045 | 242,253 | 16.49 | - | ||||||
| 01-Apr-08 | 31-Dec-07 | 4 | 31-Dec-07 | 4,072,045 | 242,253 | 16.49 | - | ||||||
| 25-Feb-08 | 31-Dec-07 | 4 | 31-Dec-07 | 4,072,045 | 242,253 | 16.49 | - | ||||||
Looking at the financially, its is quite clear that AirAsia is still much more efficient at converting revenue into profit – based on 29 May 08 announcement Air Asia profitability was at 30.1% of revenue while MAS’s 20th May 08 results puts its profitability at 3.21% of revenue. Of course we don’t know what is on the balance sheet – but as it is AirAsia has much more capacity to absorb increases in oil price surges than MAS has.
For Malaysia , it comes down to a simple question – Will MAS buy AirAsia or will Air Asia buy MAS? For the sake of competition – I hope neither scenario happens.
