In Thailand, AOT runs six airport international terminals. Phuket, Don Mueang, Chiang Rai, Chiang Mai, Suvarnabhumi, and Hatyai. Major cities are connected with these international airports for all types of flights.
Its revenue is divided into aeronautical and also non-aeronautical sector. The former includes car parking charges and landing charges paid by airline companies. It also provides airplane service charges for use boarding bridges and departure traveler service charges. The last includes terminals property rents for utilizing airport areas, workplaces, and office charges. Aeronautical source provides 56% of the revenue reported in FY2017 while non-aeronautical reference provides almost 44% revenue.
The Ministry of Finance controls about 70% of AOT Stock. That means that AOT is authentically a government organization. It is the 2nd largest company on the benchmark index of the Stock market Thailand. AOT has a huge market cap of 946 billion baht, approximately equal to S$ 39 billion.
A Flourished Thailand Tourism
We all know that significant tourists come to Thailand from anywhere in the world. Luckily for Singaporeans, it’s entirely feasible that commonly jump onto budget airline companies for a cheap flight to Bangkok 2.5 hours away. Actually, Thailand tourism is not simply thriving; it has been flourishing for a long time.
In 2002, almost 10.8 million more tourists visited Thailand and enjoyed its beauty. And a total of 35.4 million tourists travel in Thailand in 2917. So, we can observe a significant increase in tourists from 2002 to 2017, which is 8.19% CAGR.
I believe this is a huge trend that is observed further with the expansion of low-cost carriers, increasing the middle class, and also a necessary broad range development of the society in this part of the globe. As well as this gives a growing AOT stock market with big growth track. In this way, more tourist growth, more passengers as well as aircraft activity, even more income.
Best Business Model for investment
Similar to international airlines, AOT’s earn a big profit on growing tourism. Because both play a vital role in the tourist market and owner of aviation, however, they spread on a different section of the worth chain. AOT, perhaps, has a more defensive business design. Unlike airlines, AOT manages fewer competitors in the market, being the only one that controls and operates all the big cities’ international airports in Thailand. It is resisting the increase in fuel costs.
On the other hand, many airline companies varying from full-service to budget carriers and make competition with each other for money and passengers. As well as if they were to ride on the tourism in Asia, opportunities are most of the travelers would certainly land on among these international airport terminals from worldwide. As long as they land, park, get off passengers, and also take in new travelers, income will certainly keep rolling in for AOT. It is similar to interstate business.
Demand needs to Expand AOT Capacity.
AOT is expanding its airport space to overcome the demand for international passengers. The old terminal of Phuket’s has just been upgraded, and in June, it will be started. The second project is Suvarnabhumi airport with Chiang Mai, Don Mueang, and also Chiang Rai Airports’ upgraded strategy has actually also been accepted. According to this latest updates, high-speed rail will certainly also be built up to better connect with the three primary flight terminals in Bangkok.
Financial Efficiency of AOT
In AOT stock, we can clearly see FY2018 9m outcomes, earnings, and profit are gradually increase at an excellent rate that is 17.9% and 11.4%.
Take a look at ROE, it fabulously increasing with the time and also cash profits.
- Net calculated Cash rate that is FY17 from FY13, and THB is 18.6B, 17.1B, 25.9B, 23.3B, 28.9B.
- The Ratio of net Debt to net Assets is FY17 from FY13 that is 0.27, 0.1, 0.22, 0.20, 0.18.
- The net ROE is FY17 from FY13 that is 17.8%, 12.5%, 17.2%, 16.1%, 15.7%
AOT’s financial efficiency has been growing with the expanding industry of tourists. A recall at its Earnings and also Loss over the previous eight years would reveal that its earnings and revenues have actually been boosting progressively. In 2010 the THB24.03 billion as compared to in 2017to THB54.9 billion. A high CAGR of 12.5% is observed.
Payback Attributable to Investor expanded to THB23.7 billion from THB1.41 billion, an even more impressive CAGR of 49.6%. It is additionally useful that Net Margin has been preserved at around 40% in the past couple of years.
All the above calculations show that AOT stock is expanding its earning and also incomes. Revenue is backed by cash seen from the regularly increasing ops cash flow number. It has actually had the ability to maintain a high ROE of above 12% past five years as well as high ROE is achieved with reduced financial debts.
So, after reading this brief analysis content on AOT stock, you would certainly be interested in acquiring its shares. In my view, this is a wonderful, worthy investment project without any doubt.