The share price of Airports of Thailand Public Company Limited (SET: AOT) surged as much as 6.25% to THB 42.50 per share during the morning session on Thursday amid several positive factors boosting the sentiment.
CGS International Securities (Thailand) commented that the firm sees no new official news but believes the rally should be driven by several speculative factors.
Market attention centers on reports indicating that King Power and AOT have completed their negotiations, with the outcome now pending AOT Board approval scheduled for November 26.
Another major event under watch is the Civil Aviation Authority of Thailand’s (CAAT) upcoming decision on whether to allow an increase in AOT’s Passenger Service Charge (PSC), a catalyst expected by December 4. CGSI notes that investors may be moving ahead of these announcements, anticipating favorable verdicts.
Adding to market optimism are a potential shift in Chinese tourism demand from Japan to Thailand, following reports of widespread trip cancellations to Japan by Chinese tourists.
While outlining its base-case scenario, CGSI expects AOT’s concession revenue from duty-free operations to decline by about 40% versus the existing structure. The firm notes that for every 10% smaller reduction in concession fees compared to their 40% cut assumption, net profit for FY2026 could see a 7% upside.
On the PSC front, CGSI assumes international and domestic charges will rise to THB980 and THB230 per outbound passenger respectively, effective April 2026. The brokerage calculates that each additional THB100 increment in PSC above their base case would contribute THB2.7 billion and THB1.7 billion to FY2027 net profit, translating to 12% and 8% upside.
Despite these potential catalysts, CGSI reiterates its “Reduce” rating on AOT, maintaining a target price of THB38. The firm cautions that AOT’s valuation has gotten ahead of fundamentals, and anticipates potential selling once official announcements are made unless the outcomes significantly surpass current expectations.
AOT is set to report its fourth quarter fiscal 2025 results tomorrow, with CGSI projecting a core net profit of THB3.93 billion, representing an 8% year-on-year decline and little change from the previous quarter.
