Research firms estimate AirAsia Bhd's financial performance to experience short-term hiccups this year, with the entry of Malindo Airways into the local aviation industry.
Kenanga Research said Malindo's entry into Malaysia will be the immediate threat for AirAsia while the risk of higher fuel cost is still high in 2013.
The research house also estimates the frills-free airline's net profit to fall to RM725 million for the current financial year ending December 31, 2013, against RM1.878 billion posted last year.
"The financial year 2012 core net profit increased by only five per cent to RM837.9 million despite a stronger 12 per cent increase in the revenue.
"This was due to the higher increase in its fuel cost, staff cost and maintenance and aircraft related costs," Kenanga said in a research note today.
In a separate note, Alliance Research said this year, AirAsia can expect intensifying competition from both newcomer Malindo and national carrier Malaysia Airlines.
"Despite near-term hiccups, we remain positive on the fundamentals and growth prospects of AirAsia.
"Various growth opportunities lie ahead for AirAsia, including but not limited to more ancillary income streams and the opening of the new KLIA 2, which will accelerate AirAsia's passenger
growth," it said.
On Tuesday, AirAsia posted a net profit of RM350.6 million for its fourth fiscal quarter ended December 31, 2012 from RM130.7 million a year ago.
Revenue was also higher at RM1.4 billion from RM1.28 billion previously.
For the whole year, the budget carrier's net profit rose to RM1.88 billion from RM555.3 million the previous year, due to a one-off gain of RM1.16 billion from the disposal of its stake in Thai AirAsia.
Revenue also increased 11 per cent to RM5 billion from RM4.5 billion in 2011.
Alliance Research has placed a "buy" call on AirAsia stocks with a revised target price of RM3.50, while Kenanga Research has upgraded the stocks to an "outperform" rating with target price
revised upwards to RM3.23.-- Bernama