Airports of Thailand
HOLD (maintained) Target Price: Bt53.00 Price (15/02/12): Bt53.75
Airports of Thailand Plc (AOT)
What’s new? AOT yesterday reported air traffic numbers for January 2012—record highs. Passengers totaled 6,717,806 people, up by 9% YoY and 13% MoM, while aircraft movement increased by 12% YoY and 6% MoM to 42,484 flights. International passenger traffic rose by 6% YoY and 15% MoM. Domestic passenger traffic increased by 15% YoY and 10% MoM.
Comment: The rebound in air traffic numbers indicates a broad recovery across the Thai travel industry—an absence of political unrest or natural disasters. The end of the flooding together with high season for tourism facilitated the impressive statistics for Jan. Note that we expect air traffic numbers to soften MoM in Feb, due to seasonality.
Action: We think AOT’s current share price has already priced in the recovery in air traffic growth momentum with the end of the flooding. The stock now trades at a high season valuation—a PBV of 1.0x (0.5SD above its long-term average PBV of 0.9x). Even though there would be scope for upside to its long-term earnings profile if passenger service charges [PSC] were to be increased, recent concerns about terrorism may cap its share price performance. We, therefore, maintain our HOLD rating with a YE12 DCF-derived YE12 target price of Bt53.
