• What’s new

AOT announces submission deadline for Don Muang Airport duty-free concession is Dec 11. There will be 1 master contract that grants the winning bidder the right to operate the duty-free concession for 10 years and 6 months. Expecting up to 5 bidders, AOT will start selling the TOR documents from Oct 24 to Nov 8. The deadline for submission is Dec 11, presentations would be held on Dec 12-13, and the winning bidder would be announced Dec 16.

• Analysis

Expect intense competition. Despite the ban on CPN under the TOR, we still believe there will be intense competition with up to 5 bidders. This is similar to the numbers of bidders for Suvarnabhumi Airport duty-free concession in May.

In that tender, 5 bidders purchased the TOR documents: (i) King Power, (ii) BA and Lotte, (iii) Royal Orchid (ROH), Empire Asia Group, and WDFG UK Ltd, (iv) Central Department Store Ltd and DFS Venture Sg Ltd, and (v) Minor International Plc. However, only three submitted bids (i) King Power (90 score), (ii) BA consortium (80 score), and (iii) ROH consortium (70 score). King Power was the winning bidder

• Action/ Recommendation

We maintain that AOT will be a prime beneficiary of recovering tourist arrivals in Thailand. This will not only lift the company’s aeronautical revenue but also drive up competition for the concession in 4Q19-1Q20, which means higher concession revenue for AOT. Maintain BY rating with a target price of Bt87.