Morgan Stanley has raised its target price for Airports of Thailand (SET: AOT) from THB 52 to THB 75, maintaining an Overweight (OW) rating as the company’s infrastructure fundamentals strengthen. The upgrade reflects increasing predictability and stability in AOT’s cash flows, fueled by anticipated changes in the international Passenger Service Charges (PSC).
Morgan Stanley analysts highlight that from the second half of 2026, these changes in the PSC regime are set to significantly de-risk AOT’s cash flows, making them among the most reliable in the global airport sector. With PSC expected to account for two-thirds of AOT’s total revenue, the company’s dependency on the more volatile duty free segment—experiencing per-passenger declines worldwide—should diminish sharply.
Traffic projections remain robust. By 2027, AOT is expected to reach its pre-pandemic level of international passengers thanks to a continued 5% compound annual growth rate in non-Chinese travelers. This equates to an annual increase of approximately 2.7 million international passengers across AOT-operated airports.
AOT is also reducing its reliance on duty free operator King Power, now contributing less than 15% of overall revenue. Outstanding receivables of approximately THB 15 billion are anticipated to normalize by the end of 2026, with repayments scheduled in installments. Additionally, AOT has shifted its duty-free income structure from minimum guarantees to revenue-share agreements, which lowers the risk of future contract renegotiations.
Based on fiscal year 2025 actuals and a revised outlook for duty free and retail revenues, Morgan Stanley has updated its model, increasing the base-case estimate for international PSC to THB 1,120 per passenger from fiscal 2027.
