AAV shares extended a sharp decline over two consecutive trading days, falling more than 16% and pushing the price below 1 baht, under pressure from the Malaysian government's scrutiny of AirAsia Group Berhad's financial position. Most recently, shares of Asia Aviation Public Company Limited, or AAV, fell 10.42%, or another 0.010 baht, to 0.86 baht, with trading value of 221 million baht, down from 1 baht two days earlier. InnovestX Securities said Reuters reported that the Malaysian government has begun discussions with other airlines to assess the possibility of taking over or absorbing AirAsia's share of domestic Malaysian routes if its financial crisis worsens. It views this as merely contingency planning for an emergency, because AirAsia is still operating normally and this is not a direct operational problem for AAV in Thailand, but it maintained a NEUTRAL recommendation with a target price of 1 baht. Meanwhile, Krungsri Securities views the situation as Negative for AAV. Although Thai AirAsia is not expected to be directly affected, there is a risk of losing competitive advantage from the group's route network, its bargaining power in aircraft purchases, and possible bad debt from related companies, creating downside to earnings and the target price. It also noted that AAV carries the highest risk in the group from the renewed intensification of the Middle East war. Even though the share price is already below the target price of 1.19 baht, it still does not recommend investing.
Asia Aviation Public Company Limited
