Thai Airways International

Thai Airways Plc (THAI)
|  
While we do not expect a repeat of last year’s deep losses for Thai Airways, its near-term profitability is unlikely to be decent. To ride the Thai tourism boom, AOT is our preferred vehicle. We maintain our Neutral call despite a higher target price, which we now base on 0.73x P/BV (from 0.68x), reflecting our higher ROE forecast. Although we reduce 2011 EPS for the flood impact, we raise 2012-13 EPS given the stronger-than-expected traffic recovery after the floods.