CGS International Securities (Thailand) (CGSI) maintained its Add recommendation and THB8 target price for Thai Airways International Public Company Limited (SET: THAI), despite a sharp decline in third-quarter 2026 core earnings. The target offers 55.3% upside from the THB5.15 share price cited in its November 13 report, with the broker expecting peak-season travel and cheaper fuel to support a fourth-quarter recovery.
CGSI forecasts double-digit annual growth in fourth-quarter passenger yields, while fleet expansion is expected to lift passenger traffic. Jet fuel prices had dropped to US 147 per barrel by November 11 from US 170 during September–October, providing further support for margins.
The outlook follows a difficult quarter in which core net profit totalled THB694 million, down 87% from a year earlier and 42% from the preceding quarter. Although the result exceeded Bloomberg consensus by 38%, it reached only about a quarter of CGSI’s forecast. The broker noted that the small earnings base magnified the percentage differences.
Higher staffing and maintenance expenses were the main reasons for the forecast miss. Employee costs reflected salary increases that had been deferred since April 2026, while maintenance activity also increased.
Revenue growth was insufficient to offset those pressures. Service revenue reached THB48.5 billion, up 13% year-on-year and 3% quarter-on-quarter, broadly matching CGSI’s expectations. Passenger yield increased 10% annually to THB2.88 per revenue passenger kilometre, and the cabin factor stood at 76.5%.
However, the cost per available seat kilometre climbed 31% year-on-year to THB2.46, exceeding the broker’s estimate by 6%, even with fuel prices slightly below its assumption. EBITDA consequently fell 35% to THB8.8 billion, with an 18.1% margin against CGSI’s projected 22.6%.
On a reported basis, THAI recorded a THB432 million net loss, including THB641 million of expenses associated with September flooding. Core earnings per share for the first nine months represented 53% of CGSI’s full-year forecast. The broker plans to reassess its estimates after the November 23 earnings call.
CGSI’s valuation uses 4.4 times forecast 2027 enterprise value-to-EBITDA, applying a 20% discount to regional peers to account for potential share supply following the August 4 lock-up expiry.
Leadership remains another consideration after the board suspended Chai Eamsiri on October 2. CGSI expects a permanent chief executive to be appointed by the first quarter of 2027. It identified management uncertainty, competition on passenger yields and weaker travel demand as downside risks, while further fuel-price declines or stronger passenger demand could support a re-rating.
