Equity Analysis /
Thailand

Airports of Thailand PCL: BUY now for the rebound

  • Long-term value play

  • Rebound in passenger demand

  • Non-aero revenue the growth driver

Kalvalee Thongsomaung
Kalvalee Thongsomaung

Equity Research Analyst

Bualuang Securities
19 April 2022

AOT is a leading proxy for Thai tourism. The ongoing easing of entry restrictions to inbound tourists puts the stock back on our BUY list. Looking past the COVID-19 era, we forecast record high earnings for FY24 (up 22% from the FY19 number), supported by new concession terms for commercial rental space. We have re-initiated coverage on AOT with a BUY call to an end-Mar 2023 DCF-derived target price of Bt77.

Long-term value play

Tourism will recover fully and almost all arrivals will enter through one of AOT’s airports, so it’s the best proxy for the post-COVID recovery. We look ahead to FY24 (Oct 2023-Sep 2024), when we expect passenger and aircraft traffic to match (or beat) FY19 numbers. AOT’s FY24 PER of 31.5x is much lower than its FY19 PER 40.7x and—although the year is an upcycle—is only 0.7SD above the 10-year mean of 22x (in earlier upcycles, its PER has typically exceeded its long-term mean by 1.0-1.5SD). We forecast record FY24 earnings of Bt30.4bn (22% above its FY19 number), due largely to new concession terms for commercial rental space at AOT’s airports.