Kiatnakin Phatra Securities has maintained a Neutral rating on Thai Airways International (SET: THAI), setting a new price objective (PO) of THB 12.20 per share, down from previous estimates. The stock last traded at THB 9.55. Despite expectations of a record-breaking third quarter in 2025, concerns about increased government interference in THAI’s management have weighed on market sentiment, causing the company’s share price to plunge over 20%.
For 3Q25, analysts forecast THAI’s core profit to double year-over-year to THB 4.8 billion, the best third quarter performance in the airline’s history. The anticipated growth is fueled by an increase in Available Seat Kilometres (ASK) by 3% YoY, higher load factors, and robust demand, particularly on European routes where Revenue Passenger Kilometres (RPK) are set to rise by 9-10% YoY. Regional and Australian routes are also expected to see growth, albeit at a modest 1-2%. Despite a 9% decline in passenger yield due to stiffer competition, cost reductions—led by a 12-13% drop in fuel expenses and lower maintenance and interest costs—are set to drive significant earnings improvement.
Passenger volumes might dip slightly by 1-2% YoY, but forward bookings for 4Q25 are projected to jump by 4-6%, supporting continued strong performance in the latter part of the year.
However, optimism on THAI’s operational recovery is being overshadowed by governance concerns. The company faces uncertainty about potential boardroom changes, as the Ministry of Finance proposes to expand the board and replace several sitting members, potentially increasing state influence. This scenario has amplified speculation over the possible replacement of key directors, including Dr. Piyasvasti Amranand.
Kiatnakin Phatra has kept its forecast unchanged, but has revised down valuation multiples, citing the potential for future selling pressure from creditors and heightened risk due to government intervention. The new price objective reflects a 25% discount compared to regional airline peers.
