CIMB upgraded AirAsia X shares to Hold from Reduce after 2017 core net profit beat its expectations.
The carrier’s 2017 core net profit of 139 million ringgit was 32 percent ahead of the bank’s forecast amid better-than-expected earnings at Thai AirAsia X and Indonesia AirAsia X, CIMB said in a note on Thursday.
CIMB said it more than doubled its group core net profit forecasts on the back of the strong turnabout at Thai AirAsia X and the successful restructuring at Indonesia AirAsia X.
The stock target price was raised to 41 sen from 28 sen.
But CIMB added that it was not upgrading the stock to an Add because Malaysia AirAsia X was expected to see a core net profit margin of just 2.5 percent in 2018, “which is very thin and risky from an earnings volatility point of view.”
Shares of AirAsia X were flat at 41.5 sen at 2:23 P.M. SGT.