HighlightsAirAsia
Cash flow remains an issue (Fully Valued; RM1.43; AIRA
MK; TP RM1.25)
• Huge capital commitment in FY09F-11F
• Earnings deliverance is crucial but there is more
downside risk to load factor and yield
• Maintain Fully Valued with RM1.25 TP. We remain
concern on the stock given its rapid fleet expansion and
high net gearing of 3.7x.

Plantations
Lower yield, but higher exports
• July palm oil production data showed slower than
expected yield recovery in Sabah/Sarawak
• But demand is still building up towards Sep-Oct
festivities
• Yields may recover next month, but there is still supply
shortage risk
• We recommend switching out of counters with large
proportion of Sabah/ Sarawak estates.