KUALA LUMPUR (March 18): Capital A Bhd’s (KL:CAPITALA) exit from Practice Note 17 (PN17) status has encountered a slight delay, with the timeline for upliftment now expected to shift to August 2026. 

While the group completed the disposal of its aviation business on Dec 3, 2025, it must now demonstrate two consecutive profitable quarters to satisfy Bursa Malaysia’s requirements, analysts said.

Maybank Investment Bank (Maybank IB) noted that the group may not be able to present its profitable fourth quarter ended Dec 31, 2025 (4QFY2025) results for consideration. 

"Instead, it may have to present a profitable 1QFY2026 and 2QFY2026 to Bursa Malaysia instead.

"This implies that Capital A could only have its PN17 classification uplifted in August 2026 (from May/June 2026 previously)," said the research house in a note on Wednesday.

Separately, MBSB Research highlighted that management is seeking a waiver to rely on historical profitability to accelerate this exit.

Bursa Malaysia's PN17 designation flags financially distressed listed companies, requiring them to submit a restructuring plan to regularise their finances and avoid being delisted.

Maybank IB said while the Middle East and high jet fuel prices are not having an impact on Capital A's earnings, they have had an impact on the value of its investment in AirAsia X Bhd (KL:AAX).

The research house noted that due to surging jet fuel prices, 20%-owned AAX has seen its share price plunge to RM1.19 as of March 16, 2026. 

As AAX is classified as an investment in Capital A's accounts and not as an associate, the depreciation in AAX’s share price will not be reflected as a loss in its income statement.

However, that said, any depreciation in AAX's share price can reduce Capital A's shareholders' equity.

While the 39% decline in AAX’s share price since the start of the war has reduced total equity, Capital A confirmed its shareholders' equity remains positive at approximately RM610 million.

This represents 107% of share capital, which does not trigger PN17 criteria.

More positively, Capital A is maintaining its guidance for FY2026 revenue at RM3.8 billion, earnings before interest, tax, depreciation and amortisation (Ebitda) at RM600 million, and earnings at RM266 million, Maybank IB said.

The research house pointed out that the AirAsia MOVE platform is actually benefiting from the conflict, as higher airfares translate into increased commissions.

According to Maybank IB, Capital A's logistics arm has successfully passed on higher jet fuel costs via surcharges without impacting volume.

Maybank IB maintained its 'buy' call on Capital A with a target price of 75 sen, noting that even if rebased to AAX's lower market price, the stock still offers significant upside.

Similarly, MBSB Research kept its 'buy' call on the stock with a target price of 77 sen.

At the time of writing, Capital A shares were unchanged at 44 sen, valuing the group at RM1.97 billion.

AAX shares gained four sen or 3.3% to RM1.24, translating into a market capitalisation of RM4.17 billion.