Bualuang Securities Suggests to “BUY” AOT with a TP at ฿80, Despite Fewer Chinese Tours
The decrease in Chinese tourists may affect Thailand in a short period of time. Bualuang Securities suggests to "buy" AOT with a TP at ฿80/share.

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The Ministry of Tourism and Sports has revealed that the number of Chinese tourists has decreased 11.77% to 867,000 tourists in August after the ferry tragedy in Phuket two months ago. On the other hand, Bualuang Securities suggests to “buy” Airports of Thailand Public Company Limited (AOT)’s shares, seeing the strong fundamental and believe the government will find a measurement to boost Thai tourism, as well as giving a target price at ฿80/share. AOT also has a strong financial statement two straight quarters in 1Q18 and 2Q18.
 
The data from the Ministry of Tourism and Sports shows that in June, before the ferry incident in Phuket, 900,665 Chinese tourists had visited Thailand, which is 18.12% increase YOY, but the number had decreased since the incident. In July, the number decreased by 0.87% YOY, and 11.77% in August YOY.
The decrease of Chinese tourists from the ferry incident is in the expectation of Bualuang Securities, meanwhile, the government is also trying to terminate the “zero-baht” tours, causing the Chinese to decrease even further. What is even worse than that is there are likely to be no rebound in the number of Chinese tourists in the first week of October, which is the Golden Week in China and Thailand has been one of the top destinations for Chinese tourists during this period.
 
However, despite the decrease in Chinese tourists, the overall of tourists in August still increase 3.04% from 3.13 million to 3.22 million YOY (year over year). While the government would not sit idly by and doing nothing regarding the decrease of Chinese tourists. It is to be expected that the number of tourists will return to grow at a normal rate of 5% by the 4Q18 and 1Q19.