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Airports of Thailand Public Company Limited (SET:AOT), 70% stake owned by the Ministry of Finance as of December 17, 2015, operates two principal business segments, which are the airport business and hotel business. The company manages and develops Suvarnabhumi, Don Mueang, Chiang Mai, Hat Yai, Phuket and Mae Fah Luang Chiang Rai airports. Their non-aeronautical activities include office and state property rentals, services and concessions. AOT is also involved in the development of hotels near Suvarnabhumi airport. The company’s subsidiaries include Suvarnabhumi Airport Hotel Company Limited.
Total air traffic movement, including arrivals and departures, which peaked at 67,690 in January 2016, continued to decline to 61,959 in June, but was up 9.4% year-on-year from 56,636 in June 2015. The total passenger movement, which also peaked in January 2016 at 10.92 million, dropped to 8.87 million in June, up 10.32% year-on-year from 8.04 million in June 2015. Overall, long-term trends for both air traffic and passenger movement are still on the upside.
Low-cost carrier (LCC) traffic movement was up 16.43% year-on-year to 28,393 in June 2016, compared to 24,386 in June 2015. LCC passenger movement jumped 19.48% year-on-year to 4.17 million in June 2016, compared to 3.49 million in June 2015.
AOT said on May 16 that its revenues for the second-quarter 2016, ending March 31, 2016, were 13.81 billion baht, beating the 13.29 billion baht consensus estimate of 5 analysts, according to the Financial Times. Non-aeronautical revenues, about 42% of the total revenues, which are mostly concessions, increased 26.76% year-on-year to 5.82 billion baht. The company posted second-quarter 2016 earnings of 3.90 baht per share, beating the 3.76 baht per share consensus estimate of 5 analysts. Revenues and earnings were up 18.69% and 14.04%, respectively, over the same period last year.
For 2015, AOT reported a dividend of 6.54 baht a share, which represented a 92.35% increase from 2014. The 21 analysts covering the company expect dividends of 5.93 baht a share for the upcoming fiscal year, representing a year-over-year decrease of 11.35%. The next earnings announcement is expected on Aug 15, 2016. The consensus estimates are EPS of 3.41 baht on revenues of 12.63 billion baht for the third-quarter 2016.
From our technical viewpoint, shares of AOT have been trending downward along the lower trendline support of an inverted ascending triangle chart pattern after making an all-time high of 430 baht this year in early-March. The stock could continue to drift downward, as the company will report its earnings result in about two weeks. If the lower trendline support can’t hold at about the 380 baht level, the next support level is the 200-day moving average, which is now running in parallel to the lower trending support of the ascending channel. In the case that AOT bounces off the trendline support, the technical head resistance is at 410 baht per share.
Investors might want to pay attention to air traffic and passenger movements in July, which should show a short-term bounce. Political and economic uncertainties could have an impact on the performance of the company.
According to the Financial Times, the consensus amongst 23 polled investment analysts covering AOT gave the company an Outperform rating, with the median 12-month price target of 420 baht per share, as of July 29.
Disclosure: No position and no recommendation. |
