Our target price for AOT of Bt50 is based on a combination of FY2026E (Sep26) DCF fair value (Bt45/sh), and downtown duty-free (Bt3/sh), and Aeropolis (Bt2sh) values. Our assumptions include average WACC of 9.6%, medium-term international traffic CAGR of 2.5% over 2019-29E, a terminal growth rate of 3% and capex of cBt186bn over 2025E-31E (mostly Suvarnabhumi expansion).


CoE of 9.9% is based on 2.5% Rf, 0.92x mkt beta and 8% Rp. Our forecasts of concession revenue are based on KingPower paying 20% revenue sharing, in-line with pre-Covid. We believe DCF is the most suitable valuation method.


AOT is an infrastructure asset for which income growth profiles are recurring while concession lives, capacity limits and required capex plans can be logically estimated.

Key downside risks to achieving our AOT target price include: (i) KingPower’s potentially lower than 20% revenue sharing would likely cause further share price correction; (ii) potential tourism weaknesses post pent-up demand period; and (iii) unfavourable changes to policy/strategy from management and Thai Government 


Key upside risks are: (i) sharp reduction in TH10YY, (ii) Government changing policies in favour of AOT such as full aeronautical subsidies for AOT in taking over regional airports and open rooms for non-aeronautical upsides; (iii) international traffic overshooting pre-Covid trends. and (iv) no further changes to non-aeronautical revenue structure that draws back investors' confidence in non-aero outlook.