Tiger Airways (J7X.SG) is flat at $1.59, after slumping 4.2% Thursday in heavy volume after a married deal of 18.6 million shares was executed at $1.581.
Credit Suisse says the seller was RyanAsia, which has now reduced its stake to just 2.0%. “The market...will view the disposal by a major founding shareholder in a negative light. This negative sentiment...will put downward pressure on Tiger Airways' share price.”
Credit Suisse says the seller was RyanAsia, which has now reduced its stake to just 2.0%. “The market...will view the disposal by a major founding shareholder in a negative light. This negative sentiment...will put downward pressure on Tiger Airways' share price.”
It adds, at the $1.50 IPO price, Tiger would trade at CY2011E P/E of 11.7X, its premium over AirAsia P/E would narrow to 26% vs a peak of 46%. It keeps Underperform with a $1.90 target.
UOB KayHian says “valuation is now much more realistic.” It reduces its EV/EBITDA to 8X from 8.5X, still a premium to regional peers but “justified as Tiger will be able to scale up its operations and achieve higher operating margins. We thus estimate net profit could rise 87% in FY13.”
The house upgrades the stock to Hold from Sell, and raises its target price to $1.59 from $1.54.
