Equity Analysis /

Airports of Thailand PCL: Clear earnings visibility

  • Our top play in Tourism space

  • Strong passenger growth momentum

  • Chinese authorities proposed increasing flights to Thailand

Bualuang Securities
23 August 2022

We expect AOT’s 4Q22 (July-Sep 2022) loss to be its last quarter of red ink. Our forecast points to positive EBITDA for 4Q22, driven by passenger growth of 40% QoQ. We have upsized our FY23 earnings projection by 12%, as we now have expanded expect-ations for passenger traffic (from 57% of the FY19 number to 68% of the FY19 number). AOT remains our top pick in Tourism space.

Our top play in Tourism space

The stock has a strong earnings recovery story and an undemanding valuation. AOT is direct play on recovering international and local tourism. 4Q22 should be its last quarter of red ink on the bottom-line (we expect positive EBITDA for the quarter). Our model points to AOT marking a profit for 1Q23 (Oct-Dec 2022), supported by tourism high season. We expect a full financial recovery in FY24. AOT’s FY24 PER is 33.9x, 0.8SD above its 10-year mean of 19.4x. The valuation looks undemanding compared with earlier upcycles, when its PER has typically exceeded its long-term mean by 1.0SD.