SINGAPORE (June 25): Investible airports can be divided into three main regions based on prospects and valuations: Asia-Pacific, Europe and Latin America. Southeast Asia has two listed airport operators: Airports of Thailand (AOT) and Malaysia Airports Holdings.

AOT is a state-owned enterprise that controls six of Thailand’s airports. AOT is one of the biggest players in the world when it comes to investible airports, with a market capitalisation of more than US$28.6 billion ($38.9 billion) and a net profit margin of 38%. The International Air Transport Association projects Thailand’s tourism and aviation market to be among the top 10 in the world within the next 20 years. In addition, the country’s tourism sector is largely supported by the Thai government, and this should boost the aeronautical revenue segment of AOT, owing to potential increase in demand for air travel, particularly leisure travel. Furthermore, with a few major low-cost airlines launching new routes to Thailand, coupled with the increase in Chinese travellers, AOT is likely to see steady and stable earnings. In terms of security, the Thai Ministry of Finance owns a stake of almost 70% in the company and serves as a guarantor for a portion of AOT’s loans. Funding and loans should be easily obtainable. In addition, it has a low debt-to-equity ratio, which indicates a high margin of safety. More than 80% of AOT’s international traffic was contributed by foreign travellers, and the recent depreciation in Asean currencies would lead to higher spending and demand from foreign tourists in AOT’s airports, owing to a weaker baht.

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