WHETHER auspicious or otherwise, AirAsia Group Bhd has ushered in 2022 by proposing a name change to “Capital A Bhd” – probably in the quest to capitalise on the Tiger Year prosperity.
In a way, the name change may be timely as the group is no longer in the budget airline business per se but has diversified into being a super app offeror that encompasses the role of online travel agent (OTA), food delivery, e-commerce, logistics, ride-hailing and fintech, among others.
According to AirAsia Group, the proposed name “Capital A Bhd” was approved by the Companies Commission of Malaysia (CCM) and reserved by the company on Dec 28 last year.
The exercise is subject to approval by the company’s shareholders at a general meeting to be convened at a date to be announced later.
“The proposed change of name, if approved by the shareholders, will take effect from the date of issuance of the notice of registration of new name by the CCM to the company,” added AirAsia Group.
Despite the name change excitement, Kenanga Research maintained its “underperform” rating on AirAsia Group (target price: 70 sen) as the research house expects international travel to remain very modest as the global infection curve is rising again with the Omicron COVID-19 variant becoming the main coronavirus strain over the next three to six months.
This is despite AirAsia Group having successfully completed its renounceable rights issue by raising RM974.5 mil and providing strong cash injection to support the overall group. The latest fund raising is in addition to (i) two tranches of private placement, raising RM336 mil; and (ii) Danajamin’s 80% guaranteed loan of up to RM500 mil.
BigPay has also recently secured investment up to US$100 mil from a large conglomerate in South Korea, SK Group. Moreover, the group has also completed two batches of re-negotiation of lease terms with lessors which will see a lower lease rental per aircraft in the future, and had expected to complete the re-negotiations with all lessors by end-2021.
Meanwhile, Hong Leong Investment Bank (HLIB) Research retained its “hold” stance on AirAsia Group with an unchanged target price of 84 sen premised on the budget carrier benefitting from re-opening of the regional economy and domestic/regional air travel with a ramp-up of vaccination across Southeast Asia.
“The recently completed RCUIDS (redeemable convertible unsecured Islamic debt securities) rights exercise has certainly improved its existing weak balance sheet position,” opined analyst Daniel Wong in an aviation sector outlook 2022.
“The management remains committed to further improve the group’s balance sheet and liquidity. The fast growing digital business segment may provide a strong upside to the group’s valuation.”
At 10.46am, AirAsia was up 0.5 sen or 0.62% to 81 sen with 3.69 million shares traded, thus valuing the company at RM3.16 bil. – Jan 4, 2022
