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.