The analyst at Krungsri Securities has a Negative view on AAV, even though Thai AirAsia, which AAV wholly owns, is expected to avoid direct impact from the severe financial risk facing AirAsia. However, there is a risk of losing competitive advantages from the group's flight network, aircraft purchasing bargaining power, and other cooperation within the group, as well as potential bad debt from related companies. In AAV's second-quarter 2569 results, related-party receivables exceeded 14 billion baht, with 7 to 8 billion baht overdue, or 0.59 baht per share, which risks turning into bad debt if AirAsia collapses, creating downside for earnings and the target price. Krungthep Turakij newspaper reported that the Malaysian government has begun planning to handle AirAsia's financial problems by asking Malaysia Airlines and Batik Air whether they can take over AirAsia's domestic routes and passengers if necessary. This follows AirAsia's second-quarter 2569 results showing a net loss of 831 million ringgit, current liabilities exceeding 18.4 billion ringgit, and at least 500 million ringgit in overdue airport service fees to MAHB. It is also under pressure from surging jet fuel prices. AirAsia is currently rushing to raise up to 1 billion dollars from overseas bond markets and an additional 700 million ringgit in domestic credit lines to restructure its debt. The company insists its fundraising target is sufficient for its needs and that it continues to operate normally. In addition, AAV carries the highest risk in the group from the renewed intensification of the Middle East war. Therefore, even though AAV's share price is already below the target price of 1.19 baht, investment is still not recommended.
Asia Aviation Public Company LimitedKrungsri Securities advises against investing in AAV, citing AirAsia collapse risk, potential bad debt from 7-8 billion baht overdue related-party receivables, and downside to earnings and target price.
Bank of Ayudhya PCL
