Equity Analysis /

Airports of Thailand PCL: Valuation not yet expensive

  • What could sustain AOT’s valuation?

  • AOT’s 4Q22 loss to be shallower YoY and QoQ

  • Oct passenger throughput up 24% MoM (close to break-even)

Bualuang Securities
4 November 2022

We expect a turnaround to black ink for 1Q23 (Oct-Dec 2022). AOT is the gateway for inbound and outbound traffic during the festive season (there will be lots of traffic this festive season). Its valuation doesn’t look expensive compared to its historical level. BUY

What could sustain AOT’s valuation?

Some investors believe AOT’s stock price is approaching full value, but it has been considerably more expensive at times. We suggest looking to its FY24 valuation, when its earnings should surpass its pre-COVID era level. The stock trades at a PER of 36x for FY24 (Oct 2023-Sep 2024) versus a PER range of 38-41x during 2017-19. We believe its bottom-line turnaround and growth story will support the stock price. Our forecasts are a loss of Bt10.9bn for FY22, then profits of Bt10.6bn for FY23 and Bt29.5bn for FY24 (beating its FY19 number of Bt24.5bn). The drivers are a passenger recovery, higher revenue-sharing from duty-free sales, and capacity expansion (up by 25% to 60m persons for passengers and by 35% to 79 gates for aircraft in Oct 2023).