Stocks In Focus MY (AirAsia X, Bumi Armada, Globaltec Formation) – 16/12/14
AirAsia X Places RM53b Aircraft Order
AirAsia’s long-haul affiliate, AirAsia X, has placed a firm order to buy 55 new A330neo aircraft from Airbus for US$15.2 billion (RM53.3 billion), making it the single biggest A330 airline customer for Airbus with a total order for 91 aircraft.
Deliveries for the latest batch of aircraft will commence from 2018 and the company said that it would use operating leases for all of its 2015 aircraft deliveries, which will enable the airline to reduce heavy up-front cash payment, to reduce the financial impact from its aggressive fleet expansion.
The group noted that this latest deal with Airbus will enable AirAsia X to consolidate its growth rate for 2015 to 2017 before ramping up deliveries with the new A330neo models with the latest Rolls-Royce Trent 7000 engine option series from 2018 onwards.
Significance: The A330neo aircraft not only reduces fuel consumption but also increases flight range up to 400 nautical miles, allowing possible direct flights from Kuala Lumpur to Europe, according to the firm. AirAsia X believes that the new aircrafts will play a key role in helping to maintain its position as the long haul low cost leader.
Speculation Of Bumi Armada Privatisation On Tumbling Share Price
Bumi Armada’s tumbling share price and the sudden departure of its chief executive officer on 5 December is fuelling talk that the company could be taken private again.
In particular, the firm’s main shareholder T Ananda Krishnan has a track record of de-listing companies when times are bad and taking it back to the market when conditions and valuations improve.
Maybank IB Research did not rule out a potential privatisation for the stock in a recent report, noting that it was trading at around one time book value. Another analyst agreed that the company’s fundamentals were doing well and that he also would not be surprised by a privatisation move.
Significance: The prospect of a fresh corporate exercise is keeping Bumi Armada’s share price afloat above the RM1 level. Interestingly, the company had previously been taken private by Ananda in 2003 and re-listed in 2011 at an initial public offer price of RM3.03.
Globaltec Ventures Into O&G
Globaltec Formation shareholders approved the group’s proposed diversification into oil and gas (O&G) exploration and production (E&P) at an extraordinary general meeting on 15 December, paving the way for its first well drilling in March next year.
The group’s control of NuEnergy Gas (NGY), a gas and ancillary power generation development company listed on the Australian Stock Exchange with an immediate focus on establishing unconventional gas E&P in Indonesia will increase to 55 percent from 19.9 percent by the end of the year.
The group has also subscribed a 60 percent equity interest each in two O&G businesses, New Century Energy Resources and New Century Energy Services. The firm also clarified that its existing divisions namely semiconductor, precision machining, stamping, automotive and oil palm plantation will continue.
Significance: The group said that its manufacturing division might run into difficulty next year because of foreign exchange, the implementation of the goods and services tax, high fuel cost and high labour cost. Hence, it hopes to reduce its dependence on the manufacturing industry through its diversification into the O&G industry, though it will take some time for the O&G industry to produce results.
http://www.sharesinv.com
AirAsia X Places RM53b Aircraft Order
AirAsia’s long-haul affiliate, AirAsia X, has placed a firm order to buy 55 new A330neo aircraft from Airbus for US$15.2 billion (RM53.3 billion), making it the single biggest A330 airline customer for Airbus with a total order for 91 aircraft.
Deliveries for the latest batch of aircraft will commence from 2018 and the company said that it would use operating leases for all of its 2015 aircraft deliveries, which will enable the airline to reduce heavy up-front cash payment, to reduce the financial impact from its aggressive fleet expansion.
The group noted that this latest deal with Airbus will enable AirAsia X to consolidate its growth rate for 2015 to 2017 before ramping up deliveries with the new A330neo models with the latest Rolls-Royce Trent 7000 engine option series from 2018 onwards.
Significance: The A330neo aircraft not only reduces fuel consumption but also increases flight range up to 400 nautical miles, allowing possible direct flights from Kuala Lumpur to Europe, according to the firm. AirAsia X believes that the new aircrafts will play a key role in helping to maintain its position as the long haul low cost leader.
Speculation Of Bumi Armada Privatisation On Tumbling Share Price
Bumi Armada’s tumbling share price and the sudden departure of its chief executive officer on 5 December is fuelling talk that the company could be taken private again.
In particular, the firm’s main shareholder T Ananda Krishnan has a track record of de-listing companies when times are bad and taking it back to the market when conditions and valuations improve.
Maybank IB Research did not rule out a potential privatisation for the stock in a recent report, noting that it was trading at around one time book value. Another analyst agreed that the company’s fundamentals were doing well and that he also would not be surprised by a privatisation move.
Significance: The prospect of a fresh corporate exercise is keeping Bumi Armada’s share price afloat above the RM1 level. Interestingly, the company had previously been taken private by Ananda in 2003 and re-listed in 2011 at an initial public offer price of RM3.03.
Globaltec Ventures Into O&G
Globaltec Formation shareholders approved the group’s proposed diversification into oil and gas (O&G) exploration and production (E&P) at an extraordinary general meeting on 15 December, paving the way for its first well drilling in March next year.
The group’s control of NuEnergy Gas (NGY), a gas and ancillary power generation development company listed on the Australian Stock Exchange with an immediate focus on establishing unconventional gas E&P in Indonesia will increase to 55 percent from 19.9 percent by the end of the year.
The group has also subscribed a 60 percent equity interest each in two O&G businesses, New Century Energy Resources and New Century Energy Services. The firm also clarified that its existing divisions namely semiconductor, precision machining, stamping, automotive and oil palm plantation will continue.
Significance: The group said that its manufacturing division might run into difficulty next year because of foreign exchange, the implementation of the goods and services tax, high fuel cost and high labour cost. Hence, it hopes to reduce its dependence on the manufacturing industry through its diversification into the O&G industry, though it will take some time for the O&G industry to produce results.
http://www.sharesinv.com
