Air Astana Group: market cap largely covered by net cash (upgraded to BUY)
Adjusting our estimates marginally ahead of the 4Q24E results, we have upgraded Air Astana Group (AAG) back to a BUY, setting our 12M price target (PT) at USD 7.5/share (from USD 7.0/share). Despite a good performance last summer, the shares have continued to lose ground, underperforming the MSCI World Airlines Index by almost 20% since our downgrade to Hold in October 2024. At end-September 2024, the group had a net cash position of USD 474m (excluding leases). Following the underperformance since the IPO, cash now accounts for over 90% of its market cap. This ranks Air Astana among some of the cheapest airlines globally. At the same time, in the trailing 12M up to September 2024, Air Astana made over EUR 50m in FCF, after leasing payments and taxes. Its dominant market position and efficient cost structure should allow it to keep its EBITDA margin in the mid-20%s. At the current valuation, we see the airline as an attractive play on Kazakh consumers. The entry of competitors (e.g., VietJet, via the Qazaq Air deal), a KZT weakening, the macro, low liquidity and general risk-off are some of the key risks, in our view, along with the (many) risks associated traditionally with airlines.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.