A positive surprise in 3Q20 result will trigger a positive catalyst toward the share price. We take contrarian view to consensus pessimism toward AOT, as the worst-case duty-free concession cancelation is ruled out. A sharp price contraction (down 28% YTD), entail opportunity to accumulate stock for long-term investment. Given a normal year forecast in FY24, valuations are compelling at a FY24 PER of 25.3x. Our BUY rating stands at a FY21 DCF-derived target price of Bt68.
Beats all expectations
AOT posted a net loss of Bt2.9bn for 3Q20 (April-June 2020) versus net profits of Bt5.9bn in 3Q19 and Bt3.7bn in 2Q20. Excluding Bt320m for a provision set for account receivable from THAI, core loss was Bt2.6bn for 3Q20 (core profit of Bt6.1bn in 3Q19 and Bt3.7bn in 2Q20). Core loss beat our loss estimate of Bt3.9bn and Bt3.6bn for the consensus due to better-than-expected expenses savings.