Analysts Look Positive on AOT as Prime Beneficially of Tourism Growth from Reopening
Analysts had a positive outlook on AOT after the reopening in November, seeing it as a prime beneficially from monopoly.
Thailand welcomed more than 85,000 tourist arrivals in total since the reopening on November 1 to November 22. Meanwhile, the Covid-19 infection has been on a downtrend as of late, averaging around 9,000 cases a day in early November to approximately 6,400 cases on November 22, 2021.
Suvarnabhumi Airport, Thailand’s major aviation hub, saw an increasing number of arrivals as the environment came back to life. Airports of Thailand Public Company Limited (SET: AOT) would be the most to benefit from more traffic at Suvarnabhumi Airport along with another 5 major airports in Thailand owned by the company, including Don Mueang Airport.
DBS Group Research raised the target price of AOT from Bt70 to Bt75 and maintained its “BUY” rating, saying that AOT is looking to resume solid earnings growth from FY2022 pegged on the resumption of global economic despite the Covid-19 pandemic that continues to drag on.
Due to the monopolistic nature of its business, AOT is expected to be a prime beneficiary of potential tourism growth while having a strong balance sheet and solid expansion plans. The operator can expect a steady growth of foreign tourist arrivals in the long run given the status of Thailand as one of the world’s most popular destinations.
Bualuang Securities (BLS) expected AOT’s 1Q22FY (Oct.-Dec. 2021) net loss to be slightly lower compared to the same period of last year, and will be lowered compared to the previous quarter. The recovery in 1Q22FY would be due to higher traffic from tourism and transportation after the lockdown easing and the reopening in November. BLS stated that there could be a dividend payment from retained earnings.
BLS stated that AOT is the most outstanding stock in the tourism sector due to its strong financial status. The analyst preferred AOT for a long-term investment due to its monopolistic nature in the business. BLS maintained “BUY” recommendation with a target price at Bt75 per share.