Monday, June 17, 2013

Airasia X Berhad IPO 2013 - FAQ

No, this is not the FAQ page for Airasia X Berhad's initial public offering.

Airasia X should have one, for the investing average Joe, to explain the accounting jargon.

I was taken aback by its public price offer of Rm1.54 and as an average Joe I see it as a whopping 1000% over it's par value of 15 sen.

The Airasia X Berhad IPO prospectus can be found here.

In the IPO prospectus and Airasia's website here, there is a recurring source citing of - Independent Market Research Report by Strategic Airport Planning Ltd dated 22 May 2013 (“S-A-P Report”)

If I were investing rather than betting for quick gains, I would not be so confident.

I may be wrong but the report I was searching for could not be found.

What could be found however, at an SAP Group website, where listed in its recent projects was on an assessment done for Airasia Berhad way back in 2004.

As I said I may be wrong but if this was Strategic Airport Planning Ltd that is being cited, would you place confidence in a company that does not update its own website?

The AAX Berhad IPO FAQ could include this "Independent Market Research Report dated 22 May 2013"

Added 1.15pm

What is interesting from the prospectus, in the Consolidated Income Statements P/L which determined the EPS for 2012, its profit was due to foreign exchange gains and was massive in 2010.

In my opinion, forex gains does not give Airasia X Bhd a true picture of profitability or actual EPS.

If we take away the forex gains of Rm43,599,000, because it does not factor as profit derived by company perfomance and is intangible, then the company would have made a loss of Rm9,749,000 instead of profit and its EPS would be a negative 0.0365 sen.

The same would also apply for the year 2010.

1 comment:

Snuze said...

Not that I have the money to invest but this is certainly interesting info.

Thanks, Freddie!