An analysis from Kasikorn Securities revealed that it has lowered its suggestion of AOT’s shares from “buy” to “sell” and reduced the target price down to 42.55 per cent, from 70.50 baht to 40.50 baht.
Kasikorn Securities disagreed with Airports of Thailand (AOT)’s assistance measure of King Power Groups to change the minimum guarantee collection method to be based on the number of passengers, as it is expecting a loss of 133,800 million baht.
Earlier, AOT announced an extension to the period of duty-free shop operations for King Power Duty Free (KPD) and King Power Suvarnabhumi (KPS) and adjusted the minimum guarantee collection to support King Power Groups from the COVID-19 impact.
AOT also issued a decrease in the minimum guarantee price without addressing the shareholder meeting. This could lead to a decline in net profit in 2023 by 5.3 per cent, according to Kasikorn.
Kasikorn also provided a 20 per cent negative on the Corporate Governance (CG) score to AOT since the measure to support King Power Groups was issued more than once, showing that King Power Groups didn’t comply with the contract terms.
Maybank Kim Eng Securities said AOT’s earnings are likely to be adjusted downwards.
Due to the pressure from the tourism crisis, the company will have a net loss in the third quarter of 2020. Maybank downgraded the target price to around 40 baht and advised investors to look for long-term performance.
Finansia Syrus Securities recommends avoiding AOT shares because the overall profit in 2020 will drop quite hard and it will take longer to recover from the new collecting method.
AOT’s shares in the afternoon session (3:43 p.m.) on Tuesday stood at 51.50 baht per share, bouncing back up by 1.75 baht or +5.52 per cent from the opening price of 49.75 baht per share.
