Kiatnakin Phatra Securities upgraded a recommendation on Airports of Thailand Pcl. (SET: AOT) stock from Underperform to “Buy” based on the projection that growth will accelerate due to an expected rise in the passenger service charge rate.
The brokerage firm anticipates that AOT will be able to increase the passenger service charge (PSC) in fiscal year 2025, following the conclusion of the new satellite terminal and sustained capital expenditures to support continued traffic growth.
Given that AOT has maintained the rate unchanged since Suvarnabhumi Airport opened in 2008 and the higher expenses resulting from the recent expansion, KKPS expects the Civil Aviation Authority of Thailand and Minister of Transport will approve the PSC raise.
Kiatnakin Phatra also raised AOT’s price target to THB80.00 and revised the 2023 profit forecast to reflect a higher contribution from concession revenue as the new minimum guaranteed payment resumes and the anticipated PSC increase.
It is anticipated that AOT’s net income will rebound to THB9 billion this year, before growing to THB28 billion in 2024 (exceeding the 2019 level of THB25 billion) and THB40 billion in 2025.
According to KKPS projections, by 2025, the PSC for international passengers will increase from THB700 to THB900, while for domestic passengers will increase from THB100 to THB150.
In 2023, the EBITDA is anticipated to increase to THB24 billion, followed by THB49 billion in 2024 and THB64 billion in 2025.
AOT is likely to report a net profit of THB3.3 billion for the June quarter, an impressive turnaround from its loss of THB2.2 billion in the same period of the prior year due to the end of concessionaire assistance measures.