STOCKS NEWS THAILAND-Nomura likes Airports of Thailand on aviation boom; Maybank says overvalued

Wed Feb 6, 2013 1:42am EST

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Nomura Equity Research initiated Airports of Thailand Pcl with a 'buy' rating and 145 baht target price, citing the country's booming tourism industry and strong earnings outlook for Thailand's biggest airport operator.

Airports of Thailand shares rose 2.4 percent to 107.5 baht at the midday break. The strong earnings prospect took its gain to 35 percent so far since Oct. 1, the start of fiscal year 2012/2013, above a 16 percent gain of the broader SET index .

The broker started Thailand's aviation sector with a bullish outlook, saying the sector's re-rating could well continue into 2013 underpinned by a strong tourism outlook and domestic demand.

"We expect 2013 to be another strong year for the sector, with around 9 percent overall passenger number growth," it said in a report.

The prospect of weaker oil prices in 2013 and 2014 was supportive to margins and profits of airlines, boding well for return on equity and should result in another year of re-rating in these stocks, it said.

It also started Thai Airways International Pcl with a 'buy' and 28.5 baht target price and Asia Aviation Pcl with 'neutral' and 6.10 baht target price.

"Our top pick is not an airline but airport operator AOT, which we believe stands to benefit from the anticipated aviation boom in Thailand but with less earnings risk," it said.

However, Maybank Kim Eng Securities downgraded Airports of Thailand to 'hold' from 'buy', saying the stock price was now overvalued. (Reporting by Viparat Jantraprap in Bangkok; Editing by Anand Basu)

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10:09 STOCKS NEWS THAILAND-Maybank Kim cuts Airports of Thailand to 'hold'

Maybank Kim Eng Securities downgraded its rating on Airports of Thailand Pcl to 'hold' from 'buy', saying the stock price was now overvalued.

Airports shares rose 0.5 percent to 105 baht on Wednesday, above the broker's target price of 102 baht. The stock had risen 32 percent so far since Oct. 1, the start of the company's fiscal year 2012/13, reflecting strong earnings for the year.

That compared with a 16 percent gain of the broader SET index .SETI for the same period.

"We estimate AOT will report a strong 1Q12/13 norm profit (Oct-Dec) on the heavy seasonal impact and the dual-airport benefit," the broker said in a report.

It expected a limited upside of stock price in the near term as the company's core Suvannabhumi airport's phase 3 and 4 expansion would take another eight years to finish.

"The record passenger numbers in the first quarter of 20.8 million is already 27 percent of our 2012/13F target ... In our view, the price already reflects this growth momentum," it said.

0954 (0254 GMT)

(Reporting by Viparat Jantraprap in Bangkok; Editing by Sunil Nair)

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STOCKS NEWS THAILAND-Nomura upgrades SET index to 1,600

Nomura Equity Research raised its target on the Thai SET index .SETI to 1,600, the level last seen in January 1994, from 1,555, reflecting its bullish view on the banking .SETB and property sectors .SETPR.

The new SET index target would put Thailand at 14.6 times forward price-to-earnings multiple, it said.

The index was down 0.2 percent at 1,502.70 on Wednesday. It has risen 8 percent so far this year and is Southeast Asia's third-best performing bourse. It hit an 18-year closing high of 1,506.37 on Monday.

"We still have high conviction on the government's pledge to spend $72 billion over the next seven years on infrastructure," the broker said in a report.

Nomura recently upgraded Krung Thai Bank Pcl KTB.BK and TMB Bank Pcl TMB.BK to 'buy' on expectations of their turnaround stories and raised target prices on Quality Houses Pcl QH.BK, Pruksa Real Estate Pcl PS.BK and Land and Houses Pcl LH.BK, reflecting earnings per share growth upgrades.

Nomura said it would continue to be overweight on domestic stocks over cyclical ones. "Risks to our bullish view include politics, inflation, and potential bubbles in household debt," it said.

1041 (0341 GMT) (Reporting by Viparat Jantraprap in Bangkok; Editing by Prateek Chatterjee)

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