AirAsia: Now Everyone Can Fly

Just to be clear, I'm bullish

  • In this article, we’ll try to unpack how much cash runway AirAsia has remaining, and what their possible next moves might be.

  • All else being equal, the company appears to have 5-8 months of cash remaining before considering any equity funding. However, the share price is so depressed that even the estimated 44% shareholder dilution needed to raise the budgeted RM 1.5 bil will still result in a post-dilution normalized PE ratio of only 6.2x.

  • In my view AirAsia is dramatically undervalued, assuming they survive the pandemic. However given the large uncertainty involved, a small position is recommended.

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