Stock focus
Thai Airways International
Tisco Securities has reiterated its "buy" recommendation for Thai Airways International (THAI) shares, with a 12-month target price of Bt58 apiece. It expects the national carrier's margins and return on average equity to improve, due to its fleet expansion, use of retrofitted aircraft, better cost controls and efforts to enter more lucrative markets.THAI announced a lower-than-expected 2006 net profit of Bt8.99 billion, even though it was up by 32.7 per cent year on year. Its fiscal year runs from October 1 to September 30. Earnings fell short of the broker's target of Bt13.61 billion, caused by currency losses resulting from the baht appreciation and special staff bonuses of Bt2.2 billion. Despite tough competition, air-traffic demand improved 8.1 per cent year on year during fiscal 2006, which in turn boosted its passenger-load factor to 75.4 per cent, an increase of 3.9 per cent. Nonetheless, higher personnel expenses, depreciation and fuel costs were behind year-on-year declines in its earnings before interest, tax, depreciation and amortisation (EBITDA) and operating margins.
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