KGI Securities (Thailand) noted in an analysis report that the Cabinet approved Airports of Thailand Ground Aviation Services Company Limited (AOTGA) as the winning bidder for the cargo handling, apron, and ground service concession at Suvarnabhumi Airport, making AOTGA the third operator under a public-private partnership net cost (PPP Net Cost) structure.
The rights awarded to AOTGA consist of two main contracts, starting with the third cargo handling project covering import and export goods, transshipment cargo, express packages, and e-commerce logistics. The second contract covers the third apron, ground support equipment, and passenger services, including aircraft support equipment, baggage management, and passenger ground handling.
Both projects will operate under a PPP Net Cost model with a 25-year concession period and a total value exceeding THB 67 billion, with Airports of Thailand Public Company Limited (SET: AOT) set to sign the joint venture agreement with AOTGA to initiate the projects. AOTGA is a joint venture between AOT (holding a 49% stake) and Bangkok Worldwide Flight Services Company Limited (SAL) (holding 51%), with SAL being a subsidiary of Sky ICT Public Company Limited (SET: SKY).
According to KGI, Suvarnabhumi Airport’s master plan is designed for a maximum cargo handling capacity of 3 million tons per year, whereas current free zone warehouse facilities handle approximately 1.7 to 2 million tons per year across two primary operators.
The first provider is THAI Cargo (TG Cargo), handling about 1.2 million tons per year, while the second is Bangkok Flight Services (BFS Cargo), handling roughly 500,000 to 700,000 tons per year.
The addition of AOTGA as the third cargo operator is expected to expand Suvarnabhumi Airport’s cargo capacity by an additional 400,000 to 600,000 tons per year, supporting growth in e-commerce, express goods, and transshipment cargo while supporting goals to push Thailand as a regional aviation hub.
Regarding operational impact, KGI estimates that AOTGA will manage approximately 400,000 to 600,000 tons of cargo annually under an assumed average revenue of THB 10,000 per ton, providing AOTGA the potential to generate THB 4 to 6 billion in annual revenue at full operational capacity.
Assuming a net profit margin of 20%, AOT is expected to recognize a profit share of approximately THB 400 to 600 million per year from its 49% stake in AOTGA, representing a potential 1.5% to 2.2% upside to KGI’s FY2027 net profit estimate for AOT.
KGI maintains a positive long-term outlook on AOT driven by capacity expansion plans supporting operational growth, reiterating a “Buy” recommendation with a FY2027 target price of THB 71 based on a discounted cash flow (DCF) valuation with a weighted average cost of capital (WACC) of 9% and a long-term growth rate of 2%.
