Stock focus :Bangkok Aviation Fuel Services Plc
Kim Eng Securities (Thailand) has maintained a "fully valued" recommendation on Bangkok Aviation Fuel Services (BAFS), with a fair value of Bt11.60 per share.
The broker expects BAFS to report a third-quarter net profit of Bt111 million, a drop of 20 per cent year on year due to higher selling and administration expenses and the baht's appreciation of 8.7 per cent on the year. Despite a volume rise of 1.3 per cent year on year and higher service fees adjusted to US$0.027 (Bt1) per gallon, this did not offset the impact from the stronger baht. In the third quarter, the company has not realised any significant benefit from the new airport, which began commercial operations on September 28. The third-quarter volume uplift was 1.03 billion litres, up 1.3 per cent from the same period last year. This was the lowest volume growth this year. The low travel season and political troubles were the main cause. However, the volume for the first nine months increased 4.6 per cent year on year to 3.15 billion litres, which is higher than the company's target of 3-per-cent growth this year. Although the fourth quarter will be the first full-utilisation quarter for the new airport and service fees have already been revised up by $0.05 gallon, the brokerage does not expect to see significant earnings growth compared to earnings of Bt65 million in the same quarter of last year.
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