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Airports of Thailand Public Company Limited (SET:AOT) 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.
AOT said on February 15 that its first-quarter 2016 revenues were 11.81 billion baht, missing the 11.84 billion baht consensus estimate of 3 analysts, according to the Financial Times. The company posted first-quarter 2016 earnings of 3.24 baht per share, beating the 3.17 baht per share consensus estimate of 3 analysts. The revenues and earnings were up 12.08% and 18.25%, 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 20 analysts covering the company expect dividends of 5.80 baht a share for the upcoming fiscal year, representing a year-over-year decrease of 11.35%. The next earnings announcement from AOT is expected on May 12. The consensus estimates are EPS of 3.74 baht on revenue of 13.36 billion baht for the second-quarter 2016.
AOT said on Monday that combined passenger traffic surged 14.7% year-on-year in January to 10.9 million, while aircraft movements soared 10.1% to 67,690, according to Bangkok Post. Overall international passenger traffic rose 13.8% to 6.22 million in January, while domestic traffic grew 15.9% to 4.69 million. During the month of January, 5.11 million passengers traveled through Bangkok’s Suvarnabhumi airport, Thailand’s main gateway, up 7.34% followed by Don Mueang with 2.99 million, up 28.6%, and Phuket with 1.42 million, up 18.1%. Chiang Mai Airport handled 888,827 passengers, up 15.7%.
In late December, AOT opened part of Terminal 2 of Don Mueang airport to serve passengers and to ease congestion during the holiday travel season. Terminal 2 has been in full operation since early March, which opens up more concession space available to lease, meaning more revenue for AOT. Don Mueang is the busiest low-cost carrier airport in Asia, according to AOT.
From our technical viewpoint, AOT stock has been rising in an ascending wedge chart pattern and bumping into the trendline resistances. The stock made a head and shoulder reversal at 430 baht a share in early March and has been pulling back since then. There are several supports between 390 baht and 350 baht per share where the stock can bounce off.
The Thai baht is on the rise and there could be a currency risk, as 57.1% of passenger traffic is international. According to the Hong Kong-based CLSA report in January, a weaker yuan will affect travel plans with 43% indicating they may reduce the number of trips they take if the yuan depreciates by 10% this year, and 14% said there would be no impact to their travel plans.
According to the Financial Times, the consensus amongst 24 polled investment analysts covering AOT gave the company a Hold rating, with the median 12-month price target of 400 baht per share, as of March 18.
Disclosure: No position and no recommendation. |
