CAPITAL A Bhd is on the cusp of exiting Practice Note 17 (PN17) status, setting the stage for a multi-year value-unlocking exercise that includes listing five subsidiaries and potentially rewarding shareholders with a special cash dividend.
Maybank IBG Research maintained its “buy” call on Capital A with a higher target price of 75 sen from 69 sen, noting that the removal of PN17 constraints would “reopen access to capital and accelerate the group’s value-unlocking timetable.”
The plan hinges on listing five non-aviation units, namely Asia Digital Engineering (ADE), Teleport, Santan, AirAsia Next, and AirAsia MOVE, and distributing shares in specie to Capital A shareholders over time.
Maybank IBG noted that the combined value of ADE, Teleport, Santan, and AirAsia Next is pegged at US$3.5 billion (approximately RM14 billion), a valuation that excludes AirAsia MOVE and the group’s remaining stake in AirAsia X Bhd (AAX).
Capital A is also exploring options to monetise its 20% stake in AAX, comprising 655.5 million shares and 28.5 million warrants, valued at about RM1.4 billion and RM27.8 million, respectively, based on recent prices.
Maybank IBG said options being considered include: “(i) distribute them in specie gradually in tandem with retained profits generated; (ii) accumulate enough retained profits to distribute them in specie wholesale; or (iii) sell them to a third party and utilise the cash proceeds to pay a special DPS.”
The bank added that Capital A “is acutely aware that they are foremost in Capital A shareholders’ minds.”
The PN17 regularisation is effectively complete following the disposal of Capital A’s five airlines to AAX, which turned its shareholders’ equity positive at an estimated RM700 million to RM800 million.
Maybank IBG noted that “having a positive shareholders’ equity position is a prerequisite for PN17 classified companies like Capital A, to have their classification uplifted.”
While Capital A may apply for a waiver on the profit requirement, the bank expects the PN17 classification to be uplifted by May or June 2026 at the latest.
With the PN17 constraints removed, Capital A is expected to raise capital more efficiently for its non-aviation segments.
Teleport has already raised US$50 million (RM200 million) via redeemable convertible preference shares from HPS Investment Partners, a BlackRock subsidiary, which values the logistics arm at US$500 million (RM2 billion).
Maybank IBG said the proceeds “will be utilised primarily to purchase third party (i.e., non-AirAsia) cargo belly capacity.”
Other subsidiaries are following suit.
AirAsia MOVE is in talks to raise RM77 million in debt to purchase third-party flights and hotel inventory to drive higher margins.
ADE is exploring US$100 million (RM400 million) in debt to refinance borrowings and add four more maintenance lines at its KLIA hangar, with plans to increase revenue from non-AirAsia airlines to 60% from 20% in the long term.
The group is also considering a Nasdaq listing for AirAsia Next in the second half of 2026 to raise US$100 million, while Capital A itself is exploring a dual listing on the Hong Kong Stock Exchange to raise US$200 million.
AirAsia Next remains a key value driver, charging AirAsia-branded airlines a licensing and branding fee of 1% of revenue.
Maybank IBG concluded that investors stand to benefit from “the eventual in-specie distribution of subsidiary shares as each unit moves toward its own public listing.”
With over 20% upside potential to its target price, Capital A is positioned to transform its growth trajectory while returning tangible value to shareholders. — TMR
The post Capital A eyes RM14b value-unlocking cycle with five listings appeared first on The Malaysian Reserve.
View original content to download multimedia:https://www.prnewswire.com/in/news-releases/otm-2026-asias-leading-travel-show-opens-in-mumbai-as-india-becomes-global-tourism-powerhouse-302681088.html