KUALA LUMPUR: PublicInvest Research is unmoved by AirAsia Bhd's 30 per cent joint venture (JV) with low cost carrier in Vietnam and issued a neutral call with a target price of RM3.19.
The research house is of the opinion that the JV will not make material contribution to the Group’s bottom-line in the short-term.
PublicInvest Research made clear, however, that it views the partnership positively, "as this may help to enhance its route connectivity within the ASEAN region".
The low cost carrier had announced that its whollyowned subsidiary AirAsia Investment Limited (AAIL) will subscribe to 30 per cent JV for a LCC in Vietnam for RM58.2 million.
The deal will see the remaining stake subscribed by Gumin Company Limited (69.9 per cent) and Tran Trong Kien who will hold one share.
Last Friday the carrier announced the deal on Bursa Malaysia and it has since emerged that Hai Au Aviation Joint Stock Company, which operates a general aviation business in Vietnam, will form the vehicle for the JV and will be using the, "AirAsia brand for a fee as agreed between AirAsia and the JV", according to PublicInvest.