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Airports Of Thailand Is The Most Expensive Airport Stocks In The Planet [Edit or Delete]0 comments
Jan 8, 2015 12:51 PM | about stocks: AEOXF, APTPF
BKK:AOT or OTC:APTPF (Airports of Thailand PCL) is the public company in Stock Exchange Of Thailand. One of biggest capitalization in Thai market and one of the best performer is the last 3 years ( share price rose around 7 times in the given period) The profitability is very impressive ,thanks to the Chinese tourists boom in the recent years and the re-opening of the old airport in Bangkok (Donmueng) that made AOT obtain 30% NPM (Net Profit Margin) . The highest margin amongst its peer.
AOT owns 6 airports in Thailand and has a market capitalization of US$12.5 Billion. It is now officially the most valuable airport stock. Its value is surpass the runner-up such as Aeroports de Paris (EPA:ADP,OTC:AEOXF).The airports conglomerate in France that operates 3 major airports and 10 minor airports around France. ADP has is valued at US$11.9 Billion based on its recent closing price.
AOT is trading at 35 Trailing PE Ratio and has a forward PE ratio of 25 according to analyst estimate. And stock is around the all time high peek. I do not believe this valuation justified for AOT. Because its capacity is near the maximum and the expansion plans for 2015 will only increase the capacity at 15%(because at Phuket Airport,they already run overcappedly so the expansion of Phuket Airport is unlike to bring much revenue) And the major expansion plan for Suvarnabhumi Airport(Biggest airport in Thailand) will take at least 5 years to finish.
Using a simple PEG matrix , the growth of revenue for AOT is only 15% . It should be trading at 15x PE at most. And the profitability for the next 2-3 years will be hurt due to the capital expenditure to be spent on Suvarnabhumi Airport's expansion. And the expansion plan for Phuket Airport and Donmueng Airport will incur more depreciation to the income statement.
What's more ? The 30% net profit margin of AOT is likely to be smaller.It is at historically highest level in the history of company. Because in the past 2 years, AOT did not invest in any big expansion. It was in harvest season in the last 2 years. The 30% NPM is against the nature of public infrastructure company. I mean as a public infrastructure, you should not charge much fee to the public otherwise it will sacrifice the social welfare somehow. And as an infrastructure, you have to invest heavily at first. Suvarnabhumi Airport opened in 2006 and back then the profitability of AOT was not as good as it is today.
I believe AOT is 20-50% overvalue at 25x forwarded PE. Fair price should be varied between 15-20x PE. The profit for the years to come will not grow much. And AOT is unlikely to maintain this high margin that is not in-line with its peers (other Airports make 5-15% net profit margin).
Stocks: AEOXF, APTPF
Airports Of Thailand Is The Most Expensive Airport Stocks In The Planet
Airports Of Thailand Is The Most Expensive Airport Stocks In The Planet [Edit or Delete]0 comments
Jan 8, 2015 12:51 PM | about stocks: AEOXF, APTPF
BKK:AOT or OTC:APTPF (Airports of Thailand PCL) is the public company in Stock Exchange Of Thailand. One of biggest capitalization in Thai market and one of the best performer is the last 3 years ( share price rose around 7 times in the given period) The profitability is very impressive ,thanks to the Chinese tourists boom in the recent years and the re-opening of the old airport in Bangkok (Donmueng) that made AOT obtain 30% NPM (Net Profit Margin) . The highest margin amongst its peer.
AOT owns 6 airports in Thailand and has a market capitalization of US$12.5 Billion. It is now officially the most valuable airport stock. Its value is surpass the runner-up such as Aeroports de Paris (EPA:ADP,OTC:AEOXF).The airports conglomerate in France that operates 3 major airports and 10 minor airports around France. ADP has is valued at US$11.9 Billion based on its recent closing price.
AOT is trading at 35 Trailing PE Ratio and has a forward PE ratio of 25 according to analyst estimate. And stock is around the all time high peek. I do not believe this valuation justified for AOT. Because its capacity is near the maximum and the expansion plans for 2015 will only increase the capacity at 15%(because at Phuket Airport,they already run overcappedly so the expansion of Phuket Airport is unlike to bring much revenue) And the major expansion plan for Suvarnabhumi Airport(Biggest airport in Thailand) will take at least 5 years to finish.
Using a simple PEG matrix , the growth of revenue for AOT is only 15% . It should be trading at 15x PE at most. And the profitability for the next 2-3 years will be hurt due to the capital expenditure to be spent on Suvarnabhumi Airport's expansion. And the expansion plan for Phuket Airport and Donmueng Airport will incur more depreciation to the income statement.
What's more ? The 30% net profit margin of AOT is likely to be smaller.It is at historically highest level in the history of company. Because in the past 2 years, AOT did not invest in any big expansion. It was in harvest season in the last 2 years. The 30% NPM is against the nature of public infrastructure company. I mean as a public infrastructure, you should not charge much fee to the public otherwise it will sacrifice the social welfare somehow. And as an infrastructure, you have to invest heavily at first. Suvarnabhumi Airport opened in 2006 and back then the profitability of AOT was not as good as it is today.
I believe AOT is 20-50% overvalue at 25x forwarded PE. Fair price should be varied between 15-20x PE. The profit for the years to come will not grow much. And AOT is unlikely to maintain this high margin that is not in-line with its peers (other Airports make 5-15% net profit margin).
Stocks: AEOXF, APTPF