RHB Research Upgrades AirAsia to Market Perform

RHB Research upgrades AirAsia Bhd (5099.KU) to Market Perform from Underperform, and raises its price target to MYR3.18 from MYR2.66 after lifting FY12-FY13 net profit forecasts by 12% each, having moderated jet fuel price assumptions to $115-$120/bbl from $120-$125/bbl previously. "We envisage ever more crowded skies in the domestic low-cost air travel sector over the next 3-5 years on the back of Firefly's plan to expand its fleet of B737-800 from three at present to 30 by 2015." The house says it upgraded the stock as its valuations have become less demanding after it rolled forward the base year for valuation purposes from FY11 to FY12 coupled with the earnings upgrade. The stock is up 1.9% at MYR3.22.(