We use relative valuation approach to arrive at the target price. We use EV/EBITDAR of the European peers. The sector is currently trading at 3.7x on 2025E estimates. We use the sector average of 3.7x on our 2025 EBITDAR estimates to arrive at our target price of KZT 1,400. We also sense check with DCF based approach given the company's history of being profitable and cash generative through the cycle.

Air Astana Group screens as High Risk in our quantitative model, but this is driven by its short trading history since the IPO. We do not believe a High Risk rating is supported by the company's profitability track record and cash generation through the cycle, so a High Risk rating has not been applied.
We identify the following risks to the achievement of our target price: 
1. GDP Growth: Air penetration is highly correlated to GDP per capita (R squared = 0.85) and tourism contributes to c.5% of the GDP. Any impact on tourism and GDP growth will have an impact on demand for air travel in Kazakhstan.
2. Currency Risks: Volatility in USD/KZT can impact the company’s financial performance.
3. Fuel Price: We estimate that every 5% upside move to fuel unit cost would impact EBITDAR by c.-3%. 
4. Risk of Strikes: The risk of potential strikes from operational staff and competition for talent from other airlines could result in increased salaries and higher attrition rates, which would pose pressure to margins.
5. Capacity Growth: The exposure to GTF grounding will impact the Company's ability to grow and is likely to adverse impact on cost. 
6 Positive or adverse developments in these risk factors could cause the share price to remain above or fall below our target price.