UBS maintains a positive outlook for Airports of Thailand Public Company Limited (SET: AOT), countering the prevailing market view that AOT’s capital expenditure program hinges entirely on Suvarnabhumi Airport becoming a major full-service connecting hub.
The brokerage believes this expectation overstates the required threshold for success and instead focuses on the potential for improved monetisation of AOT’s existing airport network.
UBS gives a ‘Buy’ recommendation and sets a price target of THB 75.00 per share for AOT—representing an implied 31% upside—based mainly on forecasts for regulated pricing, operating efficiency, and increased monetisation. Returns on invested capital are expected to rise above 20% from FY28 onwards, without assuming full hub conversion.
Suvarnabhumi currently offers connections to 151 destinations, yet transit and transfer traffic accounts for only approximately 8% of international passengers. UBS identifies the real opportunity as converting the airport’s wide network reach into useful connectivity for passengers. Enhancements such as reducing minimum connecting times to 60 minutes could expand possible itineraries and serve as a sign of improved network productivity.
Under its base case scenario, UBS expects AOT’s net profit to increase from THB 29 billion in FY27 to THB 45 billion in FY31, reflecting a compound annual growth rate of around 12%. This growth is anticipated to be supported by judicious adjustments to passenger service charges, landing and parking fees, operating efficiencies, and a modest T&T fee.
According to the analyst, realisation of a full hub scenario is not necessary for these projections, though any significant improvements in transfer efficiency, broader multi-carrier connectivity, or increased non-aeronautical revenue would provide additional upside to earnings and valuation.
