Airports of Thailand Public Company Limited (SET: AOT) saw a sharp drop in its share price after the report of King Power, AOT’s main concessionaire is facing some liquidity issues and requested AOT for a postponement of its Minimum Guarantee by 18 months.
The share price fell nearly 14% on February 14, 2025, with another 8% drop on the next trading day.
On March 4, 2025, AOT made another announcement on the amendment of its previous announcement on allowing a late payment of Minimum Annual Guarantee (MAG) for King Power by additional two months, citing liquidity problems from its concessionaires.
The original disclosure on February 17 indicated an extension from September 2024 – February 2025, but the revision on March 4 indicated an extension from September 2024 – April 2025.
The share price dropped 6% as a result.
After dipping below the THB 40.00 threshold, investors bought the dip, resulting in a 5% gain yesterday.
Despite the gain, the share price of AOT is still trading at a lowest level since 2017.
Citi’s analyst noted that AOT’s share price declined about 35% since the end of Oct 2024, and it is incrementally clear to the firm that elevated commercial MAG is unlikely to hold. Meanwhile, aero tariff hikes look likely in 2029E rather than 2027E and Chinese tourists’ safety concerns are already on the table.
Due to this reason, Citi cut 2025-27E core earnings by 4/15/31% where the firm sits at +8%/-14%/-14% relative to the Street over the period.
While consensus earnings continue to slide since Nov 2023 and foreign ownership is at an all-time low of 10%, or 1/3 of free float, Citi sees AOT’s 25x 2026E PER as attractive from a risk/reward standpoint and upgrade AOT back to Buy from Neutral. However, the firm cut its DCF-based TP to Bt50 from Bt60.
