Malaysia Company Guide
AirAsia Refer to important disclosures at the end of this report
Version 9 | Bloomberg: AIRA MK | Reuters: AIRA.KL
DBS Group Research . Equity
26 May 2017
HOLD (Downgrade from Buy)
Time to consolidate
Last Traded Price ( 25 May 2017): RM3.13 (KLCI : 1,773.96) Price Target 12-mth : RM3.25 (4% upside) (Prev RM3.25) Analyst Marvin KHOR +60 32604 3911 [email protected]
1Q17 core earnings 25% lower, meeting our expectations but missing consensus’
AirAsia consolidated Indonesian and Philippines units as subsidiaries, others to follow this year
Margin contraction remains in view as yields pare down in the wake of rising unit costs
We lift FY17-19F core profit by 1-3% for stronger ringgit, lower associate income – TP remains at RM3.25, downgrade to HOLD on reduced upside
Upside narrows as softer outlook remains. AirAsia’s (AIRA) 1Q17 core earnings dipped 25% y-o-y as margins contracted despite achieving overall volume growth. Even as the group begins recognition of its airline units as subsidiaries over the year (temporarily obscuring comparatives), we think the underlying aggregated profitability is still set to edge down for the year. A nearer-term catalyst would have to come from a value-accretive divestment. While the stock has performed well thus far (+37% YTD), it has closed the gap to our TP of RM3.25. Given the lower upside potential, we downgrade our call to HOLD. In transformative period with ‘One AirAsia’ strategy. The group is in the process of changing recognition of its airline associates (ranging from 40-49% ownership) into subsidiaries via supplementary Brand Licensing Agreements. This is part of its goal to have all units consolidated under one AirAsia group. It also aims to achieve more cost savings from the streamlining. Over the course of the process, certain comparative figures will be inapplicable as more associate financials are incorporated – though core earnings assessment will remain similar. Margins to narrow, external catalyst required. Given rising pressure from higher average fuel costs, we expect Malaysia AirAsia cost/ASK to rise 8%, with similar or higher increases for its units in other countries. Yields (fares/RPK) are expected to edge down as competitive pressures rise – resulting in overall margin contraction. We expect core profits to narrow, though a value-accretive disposal would help re-rate the group.
Forecasts and Valuation FY Dec (RM m) Revenue EBITDA Pre-tax Profit Net Profit Net Pft (Pre Ex.) Net Pft Gth (Pre-ex) (%) EPS (sen) EPS Pre Ex. (sen) EPS Gth Pre Ex (%) Diluted EPS (sen) Net DPS (sen) BV Per Share (sen) PE (X) PE Pre Ex. (X) P/Cash Flow (X) EV/EBITDA (X) Net Div Yield (%) P/Book Value (X) Net Debt/Equity (X) ROAE (%)
2016A 6,924 2,894 2,167 2,036 1,407 241.9 73.2 50.6 242 73.2 12.7 238 4.3 6.2 6.4 5.9 4.1 1.3 1.3 36.8
Earnings Rev (%): Consensus EPS (sen): Other Broker Recs:
2017F 7,066 2,417 1,013 990 950 (32.5) 29.6 28.4 (44) 29.6 6.06 258 10.6 11.0 6.5 8.6 1.9 1.2 1.2 13.0
2018F 7,763 2,696 1,146 1,118 1,042 9.6 33.4 31.2 10 33.4 6.86 285 9.4 10.0 4.8 7.8 2.2 1.1 1.1 12.3
2019F 8,121 2,817 1,272 1,238 1,162 11.6 37.1 34.8 12 37.1 7.61 315 8.4 9.0 4.5 7.0 2.4 1.0 0.9 12.3
1 39.8 B: 15
3 37.4 S: 3
2 38.6 H: 5
Valuation: Downgrade to HOLD. Our current TP of RM3.25 is based on 1.3x (historical mean, from 1.5x before) P/BV, after adjusting its book value for expected unrecognised associate losses. Key Risks to Our View: Severe yield or ringgit depreciation. If yields or the ringgit weakens more than our expectations, earnings and ROAE are at risk of erosion. Our current forecasts assume a USDMYR rate of 4.38/4.40/4.40 in FY17/18/19F. At A Glance Issued Capital (m shrs) Mkt. Cap (RMm/US$m) Major Shareholders (%) Tune Live Tune Air Employees Provident Fund Free Float (%) 3m Avg. Daily Val (US$m) ICB Industry : Consumer Services / Travel & Leisure
3,342 10,460 / 2,433 16.7 15.7 5.1 62.5 10.4
Source of all data on this page: Company, AllianceDBS, Bloomberg Finance L.P.
ASIAN INSIGHTS ed: CK / sa:BC, PY
Company Guide AirAsia
WHAT’S NEW A time for moderation Consolidation efforts begin. In its 1Q17 results, AIRA had begun consolidating financials of Indonesia AirAsia (IAA), Philippines AirAsia (PAA) and other AirAsia Inc Group companies as subsidiaries – though ownership remains at 49% for both. This was done via the signing of a supplementary Brand Licensing Agreement that does not change its shareholding. The group targets to achieve the same for Thai AirAsia (TAA) by its 2Q reporting and other associates (AirAsia India, AirAsia Japan) within a year. Note that this implies most line items are thus no longer comparable; but our core net profit calculations remain comparable, as we adjust them for the group’s effective shareholding, regardless of equity recognition. Softer start to the year. AIRA’s 1Q17 headline profit came in at RM615.8m, though this includes RM341.7m of remeasurement gain and negative goodwill upon consolidation of its previous-associates. Netting off those, other non-core items and unrecognised associate losses, we find that core profit stood at RM285.4m (-25% y-o-y, -41% q-o-q) – meeting our expectations but below consensus’. Broad improvement in load factors. 1Q17 Malaysian operations had 4.2% RPK growth against flat ASK addition, as load factors improved 1.9ppts to 88.6% – showing better utilisation given an active fleet of 77 compared to 80 in 1Q16. Other country units likewise rose: TAA (+1.9ppts), IAA (+4.1ppts), PAA (+5.5ppts), and AirAsia India (+3.7ppts); and group-wide RPKs rose 8.5% on 88.3% load. Yields, margins contracted. From the group’s additional disclosure (aggregated Malaysia and IAA & PAA), average fares were 2% lower y-o-y, and we estimate the corresponding yield decline was 3%. The group revealed that it was actively in a fare management strategy to gain market share. Costs/ASK, on the other hand, rose 14% due to higher fuel costs and pilot salary costs. All in, the comparable EBIT was 16% lower y-o-y, with a 4.9-ppt decline in margin. “One AirAsia” strategy. The consolidation of all its airline associates as subsidiaries is the first step towards the group’s larger goal – to have an AirAsia Group-listed company which will hold all the airline units. It aims to achieve cost savings of up to USD45m across the airlines through further shared services. Over the long term, it also plans to further increase
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its stakes in its other airlines, though this currently remains constrained by individual country regulations. AAC divestment part of special dividend plans. The group revealed plans to generate special dividends every two years by monetising its adjacency / ‘private equity’ businesses. The first of them is likely leasing unit Asia Aviation Capital (AAC) – management disclosed that bidders are now shortlisted to two, though the price remains under discussion. Recapping our previous report (AirAsia: Defogging AAC’s monetisation), we think a divestment at 1.5x P/BV would be able to produce c.RM1.3bn of disposal gains and up to 38 sen in dividends. However, this depends on the size of AAC upon divestment, plus the final valuation agreed upon. We also note that the group still aims for separate listings of IAA and PAA, targeting to complete one within this year. Core outlook still softer, for now. Given rising pressure from higher average fuel costs, we expect Malaysia AirAsia cost/ASK to rise 8%, with similar or higher increases for its units in other countries. This is factoring in fuel hedges, and the group has updated its coverage to c.80% for 2H17. Yields (fares/RPK) are expected to edge down as competitive pressures rise – resulting in overall margin contraction. While the gradual consolidation of its other airline units as subsidiaries will complicate comparatives as their financials are consolidated; we still expect group core earnings to be lower y-o-y for the quarters ahead. Tweaking earnings for stronger ringgit, lower associate contributions. We tweak our FY17/18/19F core profit forecasts by 1%/3%/2%, factoring in changes in 1) USDMYR to 4.38/4.40/4.40 from 4.62/4.71/4.68, 2) offset with higher staff costs, resulting in net 2%/3%/3% reduction in cost/ASK; and 3) reduced aggregated associate earnings with updated TAA forecasts. Our RM3.25 TP remains unchanged. External catalyst required for next leap. Given the strong YTD share price performance of 37%, AIRA has now reduced its upside potential to our TP. We think the group would need a substantial external catalyst (for example, the divestment of AAC at favourable valuations) to re-rate it further. Downgrade to HOLD given the reduced upside potential.
Company Guide AirAsia
Core net profit by quarter 1QFY16 2QFY16 3QFY16 4QFY16 1QFY17* Net Profit Adjusted for: - Share of Associates' or JV Income
- Exceptionals not in P&L
- Deferred tax Core net profit
*core profits now include IAA, PAA & other AirAsia Inc. Group companies Total share of Associates and JVs' Income - Thai AirAsia - Indonesia AirAsia
- AirAsia Philippines
- AirAsia India
- AirAsia Japan
- AirAsia Centre of Excellence
- AAE Travel
- Think BIG - Tune Money Core net profit - Group
Quarterly / Interim Income Statement (RMm) FY Dec
Revenue Other Oper. (Exp)/Inc Operating Profit
% chg yoy
% chg qoq 15.0
Other Non Opg (Exp)/Inc
Associates & JV Inc
Net profit bef Except.
Opg Profit Margins
Net Profit Margins
Net Interest (Exp)/Inc Exceptional Gain/(Loss)
Source of all data: Company, AllianceDBS
VICKERS SECURITIES Page 3
Company Guide AirAsia
CRITICAL DATA POINTS TO WATCH Critical Factors Returning to ASK growth. Airline capacity is measured via ASK (available seat kilometres), which is a function of the active fleet and flight distances of routes served. Malaysia AirAsia (MAA) is looking at resuming growth by up to eight new aircraft in FY17 as strong volumes had driven up load factors, and as such we expect ASK to rise 8% in FY17. Also, efficiency improvements like reducing the time of aircraft being grounded may also help boost overall ASK.
ASK growth (%)
Load Factor (%)
Load factors to ease after peaking in FY16. Load factors determine the ASK that is converted into RPKs (revenue passenger kilometres). AIRA’s passenger load factor rose to 86.5% (+6.1ppts) in FY16 given weaker domestic competition. As we expect stronger capacity growth from both AIRA and its peers, we conservatively assume load factors to ease to 84%, though this still implies RPK expansion of 5%. Expect yields to ease. Passenger yields (fare/RPK) declined a milder 0.9% in FY16 after a 5.1% fall in FY15 as the more benign domestic competitive pressure allowed for more advantageous pricing. Given that we expect this scenario to recede in FY17F, we impute a 3% yield decline.
Fare / RPK (sen)
Forecast flattish ancillary income. AIRA has in the pipeline several initiatives to boost ancillary income (onboard WIFI, enhanced duty-free operations, new purchasing system, etc.). However, we conservatively assume flat growth in our forecast years to account for a slower pick-up in the more novel offerings, and the prevalence of value-sensitive passengers. Ancillary income / pax (RM)
Unit costs to rise on fuel, currency factors. AIRA’s key expenses can be split into cash opex, asset costs and fuel costs. We expect cost/ASK to rise by 8% in FY17F (c.1% fall charted in FY16), driven up by a weaker ringgit as overall USDdenominated costs make up c.54% of operating expenses. Also jet fuel costs will rise as it has passed its trough in FY16, though partially mitigated by AIRA hedges of c.76% of FY17F requirements. Our spot jet fuel assumptions are US$60/65/70/bbl in FY17/18/19F. Keeping a tab on regional associates. AIRA maintains a strong regional presence with its associates in Thailand, Indonesia, the Philippines, India and Japan. The group is in the process of recognising them as subsidiaries. While the group gains from the extended network and brand image, challenging operating conditions have led to losses in most units. Of the units, we are most positive on Thai AirAsia (TAA) (listed on the Stock Exchange of Thailand), and expect it to be the key contributor to associate income.
Cost / ASK (sen)
Source: Company, AllianceDBS
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Company Guide AirAsia
Leverage & Asset Turnover (x)
Balance Sheet: Expect gearing to improve. AIRA’s net gearing eased to 1.3x at end-FY16 as its improved profitability boosted equity values. While we expect capex to rise given its larger fleet expansion plan, the c.RM1bn injection from major shareholders via a new share issuance, plus further profitability is expected to keep it steady in FY17F, and easing further to 1.2x in FY18F. However, we note that if it successfully makes a divestment, the group may use the proceeds to pare this down further. Share Price Drivers: Value-accretive disposals and spin-offs. AIRA is mulling unlocking value by potentially 1) divesting its leasing arm, 2) conducting IPOs for Indonesia AirAsia, Philippines AirAsia, and flight school AACE, and/or 3) entering into JVs for its ground handling and cargo units. Favourable valuations by counterparties may prove accretive to the group, potentially in the form of cash proceeds to pare down borrowings or make dividend payouts.
Stronger performance from other country units. AIRA saw improved associate performance in FY16 primarily due to easing fuel costs which aided the group’s headline profit. As the other country airlines are gradually phased in to be recognised as subsidiaries, stronger aggregated performance can be catalytic as our base case is for their net contribution to narrow.
Key Risks: Further depreciation of the MYR against the USD. A stronger USD will pressure AIRA’s profitability as a significant portion of its operating and financing costs are in USD. Irrational competition. The emergence of irrational competition in the form of excessive capacity increases by AIRA’s competitors or new entrants pose threats to both yields and load factors. Besides the natural dilution of demand, the airline players would also drive down fares to recapture passengers. Company Background AirAsia (AIRA) is a low-cost airline that operates short-haul, point-to point domestic and international route operating out of its hub in klia2, Malaysia. The group also has similarlybranded units (with 40-49% stakes) in Thailand, Indonesia, the Philippines, Japan and India, forming a network for its airlines to leverage on for passenger connectivity.
Forward PE Band (x)
PB Band (x)
Source: Company, AllianceDBS
VICKERS SECURITIES Page 5
Company Guide AirAsia
Key Assumptions FY Dec ASK growth (%) Load Factor (%) Fare / RPK (sen) Ancillary income / pax (RM) Cost / ASK (sen) Segmental Breakdown FY Dec Revenues (RMm) MAA - Airline Operations MAA - Aircraft leasing Associates and JV Total Core PBT (RMm) MAA - Airline Operations MAA - Aircraft leasing Associates and JV Total Core PBT Margins (%) MAA - Airline Operations MAA - Aircraft leasing Associates and JV Total Income Statement (RMm) FY Dec Revenue Other Opng (Exp)/Inc Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc Exceptional Gain/(Loss) Pre-tax Profit Tax Minority Interest Preference Dividend Net Profit Net Profit before Except. EBITDA Growth Revenue Gth (%) EBITDA Gth (%) Opg Profit Gth (%) Net Profit Gth (Pre-ex) (%) Margins & Ratio Opg Profit Margin (%) Net Profit Margin (%) ROAE (%) ROA (%) ROCE (%) Div Payout Ratio (%) Net Interest Cover (x)
8.15 80.2 12.8 43.1 13.2
7.16 86.5 12.7 45.9 13.0
8.00 84.0 12.3 45.5 14.1
4.94 84.0 12.6 45.5 14.6
0.0 85.0 13.0 45.5 15.2
4,874 1,425 0.0 6,299
5,599 1,325 0.0 6,924
5,735 1,331 0.0 7,066
6,158 1,605 0.0 7,763
6,378 1,743 0.0 8,121
386 709 (800) 296
1,060 524 181 1,765
572 334 107 1,013
593 450 104 1,146
642 534 96.3 1,272
7.9 49.8 N/A 4.7
18.9 39.6 N/A 25.5
10.0 25.1 N/A 14.3
9.6 28.0 N/A 14.8
10.1 30.6 N/A 15.7
6,299 (4,716) 1,583 0.0 (800) (488) (80.6) 215 326 0.09 0.0 541 412 1,487
6,924 (4,956) 1,968 0.0 181 (384) 402 2,167 (134) 3.10 0.0 2,036 1,407 2,894
7,066 (5,724) 1,342 0.0 107 (437) 0.0 1,013 (23.0) 0.0 0.0 990 950 2,417
7,763 (6,241) 1,523 0.0 104 (480) 0.0 1,146 (28.8) 0.0 0.0 1,118 1,042 2,696
8,121 (6,508) 1,613 0.0 96.3 (437) 0.0 1,272 (33.7) 0.0 0.0 1,238 1,162 2,817
16.3 (5.5) 91.7 56.0
9.9 94.7 24.3 241.9
2.1 (16.5) (31.8) (32.5)
9.9 11.5 13.4 9.6
4.6 4.5 5.9 11.6
25.1 8.6 12.0 2.6 8.5 20.6 3.2
28.4 29.4 36.8 9.4 9.9 17.3 5.1
19.0 14.0 13.0 4.1 6.2 20.5 3.1
19.6 14.4 12.3 4.1 6.2 20.5 3.2
19.9 15.2 12.3 4.4 6.4 20.5 3.7
Source: Company, AllianceDBS
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Company Guide AirAsia
Quarterly / Interim Income Statement (RMm) FY Dec 1Q2016 2Q2016 Revenue Other Oper. (Exp)/Inc Operating Profit Other Non Opg (Exp)/Inc Associates & JV Inc Net Interest (Exp)/Inc Exceptional Gain/(Loss) Pre-tax Profit Tax Minority Interest Net Profit Net profit bef Except. EBITDA
1,699 (1,178) 521 0.0 219 (111) 464 1,093 (216) 0.85 878 381 919
1,624 (1,209) 415 0.0 11.4 (138) (33.9) 254 88.1 0.24 342 214 608
1,687 (1,242) 445 0.0 35.9 (88.9) 81.5 474 (121) 1.43 354 328 674
1,937 (1,346) 590 0.0 (85.8) (45.9) (110) 349 116 0.59 465 487 697
2,227 (1,836) 391 0.0 39.1 (124) 335 641 (57.1) 31.6 616 285 635
(21.6) 21.0 (34.9) 55.9
(4.5) (33.9) (20.4) (43.9)
3.9 11.0 7.4 53.3
14.8 3.4 32.6 48.5
15.0 (8.9) (33.8) (41.4)
Balance Sheet (RMm) FY Dec
Net Fixed Assets Invts in Associates & JVs Other LT Assets Cash & ST Invts Inventory Debtors Other Current Assets Total Assets
11,593 1,185 4,690 2,431 35.3 923 423 21,279
10,905 2,421 4,148 2,204 43.9 838 1,343 21,902
14,608 2,528 4,148 2,641 43.9 1,162 1,343 26,474
15,665 2,632 4,148 3,013 43.9 1,276 1,343 28,122
15,317 2,728 4,148 2,840 43.9 1,335 1,343 27,754
ST Debt Creditor Other Current Liab LT Debt Other LT Liabilities Shareholder’s Equity Minority Interests Total Cap. & Liab.
2,432 1,624 1,123 10,185 1,467 4,447 0.0 21,279
1,945 1,965 1,091 8,634 1,653 6,619 (5.2) 21,902
1,945 2,000 1,131 11,134 1,653 8,616 (5.2) 26,474
1,945 2,176 1,188 11,634 1,653 9,530 (5.2) 28,122
1,945 2,270 1,217 10,134 1,653 10,540 (5.2) 27,754
(1,367) (10,185) 52.5 (642.8) (88.2) 0.3 0.7 0.6 2.3 2.3 (7.0) 0.9
(831) (8,375) 46.4 (879.3) (19.4) 0.3 0.9 0.6 1.3 1.3 (2.1) 1.3
(582) (10,438) 51.6 (748.1) (16.6) 0.3 1.0 0.7 1.2 1.2 35.7 NA
(701) (10,566) 57.3 (712.7) (15.0) 0.3 1.1 0.8 1.1 1.1 15.7 NA
(766) (9,239) 58.7 (732.4) (14.5) 0.3 1.0 0.8 0.9 0.9 6.3 NA
Growth Revenue Gth (%) EBITDA Gth (%) Opg Profit Gth (%) Net Profit Gth (Pre-ex) (%) Margins Opg Profit Margins (%) Net Profit Margins (%)
Non-Cash Wkg. Capital Net Cash/(Debt) Debtors Turn (avg days) Creditors Turn (avg days) Inventory Turn (avg days) Asset Turnover (x) Current Ratio (x) Quick Ratio (x) Net Debt/Equity (X) Net Debt/Equity ex MI (X) Capex to Debt (%) Z-Score (X)
Source: Company, AllianceDBS
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Company Guide AirAsia
Cash Flow Statement (RMm) FY Dec
Pre-Tax Profit Dep. & Amort. Tax Paid Assoc. & JV Inc/(loss) Chg in Wkg.Cap. Other Operating CF Net Operating CF Capital Exp.(net) Other Invts.(net) Invts in Assoc. & JV Div from Assoc & JV Other Investing CF Net Investing CF Div Paid Chg in Gross Debt Capital Issues Other Financing CF Net Financing CF Currency Adjustments Chg in Cash Opg CFPS (sen) Free CFPS (sen)
215 703 (31.0) 800 (138) 567 2,191 888 (53.8) 258 0.0 71.4 1,164 (83.5) (2,456) 0.0 (11.9) (2,551) 290 1,093 83.7 111
2,167 745 (18.0) (181) (1,401) 41.6 1,354 219 0.0 (145) 0.0 76.0 150 (111) (2,207) (0.2) 0.0 (2,318) 129 (685) 99.0 56.5
1,013 967 (23.0) (107) (249) 0.0 1,602 (4,670) 0.0 0.0 0.0 0.0 (4,670) 0.0 2,500 1,006 0.0 3,506 0.0 437 55.4 (91.8)
1,146 1,069 (28.8) (104) 119 0.0 2,202 (2,127) 0.0 0.0 0.0 0.0 (2,127) (203) 500 0.0 0.0 297 0.0 372 62.3 2.24
1,272 1,108 (33.7) (96.3) 64.8 0.0 2,315 (759) 0.0 0.0 0.0 0.0 (759) (229) (1,500) 0.0 0.0 (1,729) 0.0 (173) 67.3 46.6
Source: Company, AllianceDBS Target Price & Ratings History
Source: AllianceDBS Analyst: Marvin KHOR
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Company Guide AirAsia
AllianceDBS recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame)
Share price appreciation + dividends Completed Date: 25 May 2017 21:14:30 (MYT) Dissemination Date: 26 May 2017 08:49:35 (MYT) Sources for all charts and tables are AllianceDBS unless otherwise specified. GENERAL DISCLOSURE/DISCLAIMER This report is prepared by AllianceDBS Research Sdn Bhd (''AllianceDBS''). This report is solely intended for the clients of DBS Bank Ltd, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of AllianceDBS Research Sdn Bhd (''AllianceDBS''). The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies. Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report. This publication has not been reviewed or authorized by any regulatory authority in Singapore, Hong Kong or elsewhere. There is no planned schedule or frequency for updating research publication relating to any issuer. The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that: (a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein. Please contact the primary analyst for valuation methodologies and assumptions associated with the covered companies or price targets. Any assumptions made in this report that refers to commodities, are for the purposes of making forecasts for the company (or companies) mentioned herein. They are not to be construed as recommendations to trade in the physical commodity or in the futures contract relating to the commodity referred to in this report.
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Company Guide AirAsia
DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making. ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate 1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or 2 his associate does not have financial interests in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group. COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), DBSV HK or their subsidiaries and/or other affiliates do not have a proprietary position in the securities recommended in this report as of 28 Apr 2017. 2.
Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.
Compensation for investment banking services: 3.
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Disclosure of previous investment recommendation produced: 4.
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Company Guide AirAsia
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Company Guide AirAsia
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