The share price of Asia Aviation Public Company Limited (AAV) rose ฿0.16/share or 6.30% to trade at ฿2.70/share as of 14:41 local time on Monday with a trading value of 318 million baht.
KGI Securities has given an “Outperform” rating on AAV with a target price at ฿3.25/share, based on 0.9x P/BV, -0.5 SD, seeing a better outlook than its peers.
KGI expected AAV to report a 4Q20F net loss of only Bt208mn, improving significantly from a net loss of Bt1.84bn in 3Q20. The key reason would be a foreign exchange gain of around Bt1.2bn in 4Q20F, due to the stronger baht QoQ. Excluding forex, 4Q20 normalized loss would be Bt1.41bn, compared to a normalized loss of Bt994mn in 3Q20.
The improving outlook for 2021F will be led by i) cost-cutting, ii) re-opening of borders (less price competition), iii) widespread availability of vaccines, iv) potential growth in cargo business segment, and v) consolidation of airlines.
The security company saw price competition in the airline industry in the short term and we expect weaker airlines to be hit by competition in ticket prices. AAV still looks better than its peers.