Airport of Thailand
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Share price already reflects strong growth in 2015 HOLD
Airport of Thailand Plc (AOT)
-1Q15 profit grows yoy first time in three quarters
Thanks to the stable political situation and tourism season, AOT's passenger volume revived by 21.6%qoq and 13.3%yoy and its flight volume rebounded 17.6%qoq and 9.1%yoy in 1Q15 (ended December 2014), thus boosting service revenue significantly by 16.4%qoq to B10.5bn. Moreover, since AOT did not have to recognize usual high personnel bonus payment likely in 4Q14, its 1Q15 operating expensed dropped by 13.8%qoq to B5.5bn. Overall, 1Q15 normalized profit (ended January 2015) rebounded 67.6%qoq. Including extraordinary profit of around B127m in the two recent quarters, 1Q15 net profit was B3.9bn, growing 58.7%qoq and 3.7%yoy, the first yoy growth in three quarter.
- Profit to rebound significantly yoy for the remainder of FY2015
AOT's profit is expected to prosper for the remainder of FY2015, making the year's peak in 2Q15 (tourism season) and decrease afterward since its passenger volume would drop in 2H15 which is a low season. Still, profit base in 2Q14-4Q14 was very weak because the political tension was fiercer than in 1Q14, so AOT's 2Q15-4Q15 profit is projected to rebound more significantly from the same period last year compared with 1Q15. Overall, we maintain our FY2015 earnings forecast at B16.5bn, growing 35%yoy
- Already reflects good growth in 2015. HOLD for new upside.
Although AOT's profit is expected to rebound significantly in 2015, the share price has already absorbed this positive factor and shown a limited upside from the fair value of B320. We downgrade our recommendation from BUY to HOLD. However, we may upgrade our recommendation if the conclusion on Suvarnabhumi phase 2 project is made. AOT plans to invest B6.0bn more in its expansion project to increase the capacity more from 15 million passengers/year to 20 million; this plan is currently under the cabinet's deliberation. We maintain our projection under the assumption that AOT uses its initial expansion plan.
