KUALA LUMPUR: Share price of AirAsia Bhd fell as much as
16 sen to RM2.86 on Thursday on concerns about the impact of Lion Air's entry
into Malaysia but CIMB Equities Research recommended investors to accumulate
AirAsia on share price weakness.
At 11.34am, shares of the
low-cost carrier was down 16 sen to RM2.86. There were 42.29 million shares
done.
The FBM KLCI rebounded, up 7.13
points to 1,620.81. Turnover was 385.89 million shares valued at RM471.02mil.
There were 298 gainers, 217 losers and 253 counters unchanged.
CIMB Research had lowered the
target price from RM4 to RM3.50.
"We recommend investors to
accumulate AirAsia on share price weakness as its model is resilient, and
investors should not underestimate AirAsia," it said.
The research house said Lion
Air's impending entry into Malaysia is the latest in a list of challenges
thrown over the years at AirAsia, which successfully fought off MAS in 2005-06
and Firefly's LCC business in 2011.
"While competition could be
tougher ahead, AirAsia will survive the threat. We see increased risks for
AirAsia as Malaysia is its most profitable base and the source of funds to
support fledging overseas associates," it said.
CIMB Research said as such, we
cut our EPS forecasts on lower yield assumptions, and reduced its target price
(still pegged to 9.0 times core P/E), but roll over to an end-2013 target.
"Our Outperform rating stays
as the share price has already taken a beating," it said.
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