Citi Keeps AirAsia As Sell, MYR1.66 Target

Citigroup keeps AirAsia as Sell, target at MYR1.66 as "risks are on the downside", given rich valuations (22X PER, which is 23% premium to global sector peers, 24% premium to Malaysian market), 49% foreign shareholding. Despite significant market share gains in Malaysia (now 50% vs 30% in FY06), Citi concerned about slowing growth in overseas JVs - Thai and Indonesia AirAsia. Expects AirAsia to meet FY07 recurring net profit of MYR198 million or reported earnings of MYR400 million if allowed to include deferred tax credits in audited accounts. Stock down 0.5% at MYR1.95 in moderate trade midday