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AIRA (AIRA MK): Budget Carrier Continues Expansion

AirAsia: Budget Carrier's Momentum Is Cruising Nicely

CEO, A. Stotz Investment Research

Dr. Andrew Stotz, CFA

Equity Bottom-Up

<ul><li>Cheap on a core profit basis, slow asset growth, and low correlation with Western stock markets relative to its sector</li><li>AirAsia became the first and only carrier to connect Kuala Lumpur and Luang Prabang (Laos) and expects to benefit from increased tourist arrivals to Philippines by launching Taipei to Manila and Cebu flights in 4Q16</li><li>New digitalization plan for 2017 focused on developing new mobile and online solutions to reduce costs and facilitate booking with target to raise mobile contribution to sales from current 10% to 25% share in 2017</li><li>AIRA trades below ASEAN Transportation at 17CE* 1.1x PB but offers more than double the ROE</li><li>Risk: Accidents, terrorist incidents and higher fuel prices</li></ul><p><em>* Consensus Estimates</em></p>

Cheap on a core profit basis, slow asset growth, and low correlation with Western stock markets relative to its sectorAirAsia became the first and only carrier to connect Kuala Lumpur and Luang Prabang (Laos) and expects to benefit from increased tourist arrivals to Philippines by launching Taipei to Manila and Cebu flights in 4Q16New digitalization plan for 2017 focused on developing new mobile and online solutions to reduce costs and facilitate booking with target to raise mobile contribution to sales from current 10% to 25% share in 2017AIRA trades below ASEAN Transportation at 17CE* 1.1x PB but offers more than double the ROERisk: Accidents, terrorist incidents and higher fuel prices* Consensus Estimates

AIRA: Innovative Budget Carrier Is Cruising Nicely

AirAsia Berhad

AIRA: Innovative Budget Carrier Is Cruising Nicely