Friday, June 22, 2018

How to not miss the Airasia's 2017 AGM

If one is not able to make it to the AGM which happens to be held in a far away land in Sepang where it is some 90km from heart of KL, do spend 22 minutes to watch this IR video. Believe me, you will not miss much.

Basically, during the AGM which covered more than 150 minutes, Tony Fernandes presented the strategy of the company and the bulk of his presentation was spent on its digital strategy. He went on to say that analysts until today do not know how to value Airasia while he deemed the company to be more of a digital company than an airline company. Or at least he wants people (especially investors) to deem it that way.

For me, as an investor, basically I want to put a message that in buying Airasia, one is buying into a company which really has strong substance (with good profits) and it has game plan which will put the company into becoming more than an airline  for the next 10 years.

(Despite painting the plane blue in one instance), Tony I can say is ahead of its time when coming to do with strategy for its group.

Normally, for any thriving or not so thriving airline, it will try to find disruption points and react to it. Airasia is trying to be the disruptor. It is not looking at just being an airline but it also looks at the tourism and even e-payment industry. Through its platform, it goes into the business where Expedia is in. It goes after Alipay. But in other ways, it also complements Expedia, Airbnb. Think of this, while Jack Ma manages to convince people that Alipay is potentially bigger than Alibaba, and raising funds to that value, it is not that crazy to pursue Airasia in that manner. In most areas, it does not compete against Alibaba but in areas on digital payment, e-commerce it may be.

Many companies which are burning money such as Grab, GoJek are moving into adjacent areas such as e-wallet, delivery service and they are today valued at much higher valuation than Airasia. Grab was just valued at USD10 billion by Toyota while Airasia is valued at RM10 billion from its market cap.

Even among its peers (VietJet, SIA etc) in the airline business, Airasia is much lesser valued.

Do watch through the video, and think and compare against other companies of today.

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