GMT report does not reflect AirAsia's real performance, says analyst

A Hong Kong based research firm GMT Research has come out with a report which questions AirAsia’s accounting, profit generation, cash-flow issues, leverage and group structure, and how all those factors might have caused their stocks to plunge in Kuala Lumpur trade.

According to Shukor Yusof from Endau Analytics, such sentiments are normal in especially when reports from research firms are produced. However, it does not reflect that the company is facing problems.

Shukor said, he has studied AirAsia since the day it was formed and still believe the company’s transparency.

“There are some negatives that have been generated by GMT Research report. In my view, AirAsia remains fundamentally sound as a group, company and airline.

“Clearly there are issues in the aviation industry that affect all the airlines. AirAsia has some weaknesses – AirAsia X is fixing some problems with routes and business strategies,” he said.

Shukor added, all that is not the reason why Sepang stock has slumped as much as 5 percent Friday while AirAsia X shares declined as much as 2.2 percent.

“I think it will recover, perhaps not as high as it was six months or a year ago. But then again it depends on other factors in the industry such as fuel price and performance of AirAsia X and it’s subsidiaries in Thailand and Indonesia.

“And the fact that Tony (Fernandes) hasn’t said anything does not mean that everything is bad,” he said.

GMT Research said, it’s in discussions with the region’s biggest budget carrier about its concerns.

It’s founder Gillem Tulloch said, the June 10 report questioned the airline’s “accounting, profit generation, cash-flow issues, leverage and group structure.

The report is currently available only for the researcher’s subscribers and the firm can publicly discuss the matter only from June 24.

READ: AirAsia accounting, cash flow questioned in GMT report