Tiger Air: Citi tweaks TP to $0.60 from $0.59, after adjusting FY12-14E net profit estimates and incorporating the effects of the company's rights issue. Keeps a Sell rating, saying the stock is not yet a turnaround story.
"While the completion of the rights issue will relieve balance sheet concerns...the 'markedly larger net loss' in 2QFY12E guided by the company and lack of clarity on profit turnaround continue to serve as share price overhangs."
It says its key concerns are how Tiger can profitably deploy new aircraft it's taking delivery of, how fast it can turn around Tiger Australia and the profitability and growth plans of its SEAir partnership, as operations are based in Clark Airport, which is difficult for passengers to reach. Adds, it's not overly concerned about recent complaints against Tiger Australia's marketing materials and its operations in the Philippines; "we view these as either a result of frustrations of its consumers or lobbying by its competitors."
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