AOT will rise back into profit in 2022/2023, say stock gurus

AOT informed the Stock Exchange of Thailand on Wednesday that it will cut six airports' fixed monthly concession charges by 15-20 per cent from February 1, 2021 to January 31, 2022.

Suwat Wattanapornprom, an analyst at Asia Plus Securities, said the move would affect AOT's performance in the short term.

He expects AOT to suffers losses of Bt2.7 billion with revenue of approximately Bt20 billion in fiscal year 2020-2021, before turning a profit of Bt1.7 billion on revenue of approximately Bt45 billion in 2021-2022.

"However, the Covid-19 outbreak is still pressuring AOT. If its share price drops, it would be an opportunity for long-term investment, since the company will benefit from distribution of Covid-19 vaccine in the middle of next year," he said, adding that Asia Plus Securities had maintained its target price for AOT shares at Bt61.

Kitichan Sirisukarcha, senior vice president for research at CGS CIMB Securities, said AOT's move and the declining number of domestic flights would have a limited impact on the company's performance.

"The market has not factored in progress on Covid-19 vaccine, which is expected to be made widely available in the middle of next year. Hence, we expect the number of passengers to increase in the second half of next year," he said.

"However, we expect AOT to turn from loss to profit in fiscal year 2022-2023, as foreign arrivals are not expected to rebound to pre-crisis levels until 2023."

He added that CGS CIMB Securities had maintained its target price for AOT shares at Bt60, advising investors to buy when the price drops to Bt54-Bt55.

The 20 per cent concession reduction applies to Suvarnabhumi, Don Mueang, Phuket and Chiang Mai airports. The 15 per cent reduction applies at Hat Yai and Mae Fah Luang-Chiang Rai airports.