AIRASIA: BUY, target price RM1.47

 MIDF Research expects the planned listing of AirAsia Bhd's (5099) 16 per cent owned AirAsia X to have minimal impact on its earnings. 
 
"We view this planned initial public offer (IPO) positively as it creates a distinct separation between the two companies. This would allow each to concentrate on its core competencies while taking advantage of synergies such as a common brand and feeder services e.g. long-haul passenger on AirAsia X feeding into AirAsia for short-haul travelling and vice versa.

Besides, the separation would allow AirAsia X to stand on its own. Hence, any future burden on AirAsia to carry AirAsia X will be lifted.

In a statement early this week, AirAsia X said the company is planning for an IPO by the second half of 2011 to fund for the acquisition of 27 new Airbus aircraft.

- by Business Times