On Monday at 02:01 PM (Bangkok time), the share price of Asia Aviation Public Company Limited (SET: AAV) jumped by 6.56% or THB 0.16 to THB 2.60, with a trading value of THB 265.11 million.
Yuanta Securities noted a favorable outlook for AAV attributed to the recent drop in global oil prices, which have decreased by 14% QTD. This decline is expected to reduce AAV’s main operating cost – fuel expenses – consequently boosting the company’s gross profit margin in the third quarter of 2024.
Additionally, with the Thai baht strengthening against the US dollar, moving from THB 36.7 per dollar to THB 33.8 per dollar, AAV is poised to achieve increased gains from exchange rate fluctuations in 3Q24.
AAV is reinitiating the acquisition of aircraft to enhance its fleet and may explore expanding its flight routes as part of the company’s growth strategy aligned with the ongoing recovery in the tourism sector. The addition of Airbus A321 neo aircraft, featuring 50 available seats and offering 20-30% greater fuel efficiency, is expected to better facilitate AAV’s operations. Furthermore, AAV is considering the acquisition of other aircraft models capable of longer flights and increased range in the future.
Yuanta Securities foresees AAV’s performance to exhibit YoY growth, with significant QoQ improvement in 3Q24 and YoY growth in 4Q24. This positive outlook is underpinned by an anticipated increase in passenger numbers and average fares during the high season. The analyst has recommended a ‘BUY’ rating for AAV and set a target price of THB 3.30 per share by the conclusion of 2024.
