AIRA (AIRA MK): Budget Carrier Continues Expansion

The accounting research firm, GMT Research

Lisa Mangkornkarn

The accounting research firm

GMT Research

GMT Research provides independent insight into markets, sectors and companies throughout Asia. Our unique method of mining a comprehensive collection of corporate financial statements for key data allows us to evaluate the financial health of a company, sectors and the market at large. We also investigate the application of accounting standards by companies and sectors, shedding light on the quality of reported profits. Armed with this information, we help investment professionals navigate the financial landscape.

Equity Bottom-Up

Our note on AirAsia last week seemed to hit a bit of a raw nerve both in the market and with AirAsia&rsquo;s CEO, Tony Fernandes. He called our report &ldquo;garbage&rdquo;. Well, perhaps the market&rsquo;s reaction suggests that investors&rsquo; view AirAsia&rsquo;s accounting as&hellip; well, you get what I mean. He has subsequently appeared on Bloomberg TV and issued a press release. His performance was very smooth but if you check-up on some of his facts, some of what he said is&hellip; well, again you get what I mean. On a serious note, we wish management would address the issues we&rsquo;ve raised. For example, how much of profit (not revenues) comes from inter-company transactions? It's a very simple question to answer. And why did disclosure surrounding related party transactions decline just as payments stopped?That just doesn't look good.

Our note on AirAsia last week seemed to hit a bit of a raw nerve both in the market and with AirAsia&rsquo;s CEO, Tony Fernandes. He called our report &ldquo;garbage&rdquo;. Well, perhaps the market&rsquo;s reaction suggests that investors&rsquo; view AirAsia&rsquo;s accounting as&hellip; well, you get what I mean. He has subsequently appeared on Bloomberg TV and issued a press release. His performance was very smooth but if you check-up on some of his facts, some of what he said is&hellip; well, again you get what I mean. On a serious note, we wish management would address the issues we&rsquo;ve raised. For example, how much of profit (not revenues) comes from inter-company transactions? It's a very simple question to answer. And why did disclosure surrounding related party transactions decline just as payments stopped?That just doesn't look good.

AirAsia Berhad

Sticks & Stones: AirAsia/Noble/Abenomics