Your Answer 17th Mar 2017

Question by

Unknown12 March 2017 at 06:39

How about Earning /Share , ROE , OCF for Air Asia shares.?

Hi there, 

If you would like to have a quite glance on those important ratios, you may refer to MalaysiaBiz. But of course, the best source will be their official annual report (but some ratios, you might need additional effort to tabulate it). 

People normally perform Time Series Analysis and Cross Sectional Analysis by using those ratios. However, since AirAsia is the only airline share listed in Bursa (as far as I know), thus, I doubt that we able to perform any Cross Sectional Analysis. We can only perform Time Series Analysis. Since AR 2016 yet to release, I will compare those ratios for 2015 with 2014.

Ratios	AR 2015	AR 2014	Changes
EPS (diluted)	19.4 sen	3.0 sen	+546.67%
ROE	12.16%	1.82%	+568.13%
OCF	RM 2,203,938,000	RM 302,031,000	+629.71%
Operating Margin	33.62%	5.40%	+522.59%

I believe the OCF that you mentioned is referring to Operating Cash Flow. However, when talk about operating cash flow, people will look at the Operating Margin rather than Operating Cash Flow itself, because Opearting Margin apart from telling you that whether the company is earning from their main operating or not, it also tells you whether how much the portion of the revenue it generated is contributed by operating earning. If you would like to find out more about Operating Margin, read here.  

So back to the Ratios above, in fact you can see that all those ratios have increased significantly from year 2014 to 2015. However, please bear in mind, AirAsia is a big group where its financial statement is contributed by many subsidaries, thus, do not justify whether the company is a potential stock or not by solely looking at those ratios. You will hardly see the true potential, or sometimes seeing a fake potential.

Last but not least, just some sharing about what direction I am coming from for my stock analysis blog. So that, the stock investors that reading my blog know how it actually benefits you. From my blog you hardly see any figures because I am just sharing the potential of a stock via sentiment, rather than fundmental analysis or technical analysis which many people is doing. Sentiment is more like how people react to a particular share when the official business news are released. However, some news are not directly related or publish by the company itself, people tends to overlook the influence of these news. Thus, my blog actually compile most of the news that I come across, so that you can see how does these news affecting the moving of the share of a particular company. 

Normally for me, after sentiment analysis, only I will go into fundamental analysis to further firm my buying or selling decision of that company. And through technical analysis, I justify when to buy and sell to maximize my gain.

Hope these info does helps you!  See you around, Mr. Unknown (virtually :) )

  

Stock Analysis: AIRASIA 5099 as of date 10th Mar 2017 (UTC+8:00)

 - - - created on 10th Mar 2017 (UTC+8:00) - - -

AIRASIA 5099 BUY, SELL, or HOLD?

Surprisingly, AirAsia share price has rise significantly close to RM 3.00 this year, way faster than what I predict to be happend in 3 years time. Unfortunately, I have disposed my share around RM 2.60 and aiming for other more potential share, but I do not regret that because one thing that we should keep in our mind. Greedy is the biggest enemy in stock market. Never chase after the maximum profit, because you might end up with loss.

Well, back to the stock. So why is it rising this significantly?

• Market is motivated by the news that AirAisa is in the mid of disposing their aircraft leasing unit, Asia Aviation Capital Ltd, where the earning will be return to the investor as dividend this year (predicted by CIMB Research, see link).

• More important, this is even strengthen by the action of their shareholder personal share buyback (see AirAsia Bursa Annoucement on 1st Mar 2017). 

So, is it time to BUY, SELL, or HOLD for AirAsia? The actions to be taken by short, medium, and long term investor is different as below.

Short Term Investor
People who invested: SELL at range RM 2.80 - RM 3.00
Why: Due to the catalyst news above, that's why AirAsia price rise significant. I believe this bullish trend will soon cool down and lead to slightly price drop.
People who yet to invest: CLOSE CASE, do not aim AirAsia at the moment
Why: AirAsia does not pay out constant dividend, therefore, for short term investor, you will be aiming for capital gain. And now, I see lack of potential for capital gain in short term. 

Medium / Long Term Investor 
People who invested: HOLD
Why: I still see AirAsia as potential company in at least 6 years time from now. Therefore, as a medium or long term investor, you can always hold the share and enjoy the shareholder benefits if the company is making money. 
People who yet to invest: BUY only if the price drop around RM 2.60
Why: Although medium or long term investor is aiming to earn via shareholder benefits. However, you also hope that the capital you invested doesn't shrink. Therefore, for the sake of capital protection, it still safer for you to enter at RM 2.60, unless you are risk taker.

My defination of Short, Medium, and Long term investor as below.

• Short Term: 3 years and below
• Medium Term: 3 to 6 years 
• Long Term: 6 years and above

Please be reminded that above is just a recommandation, digested the info and make your own decision. Good Luck!