Result Update Report: ACV - Sweet Spot of Earnings Growth Is Insight
ACV, among other aviation stocks, has been off investors’ radar since the pandemic outbreak mostly due to its unjustified valuation. However, the international market is on its trajectory to get back to the pre-covid level over the next two years, driving stronger core earnings growth and bringing ACV’s valuation to the level that makes more sense for investment. Current 2023F/24F EV/EBITDA of 14.4x/12.8x respectively presents a 19%/28% discount to the pre-covid (2017-2019) mean level of 17.7x while we project that ACV’s core NPAT will recover to 2019 level in this year, before surpassing 2019 figure by 13% in 2024. Furthermore, we believe ACV is the best way to get exposed to not only the continued recovery of the aviation industry in the next two years, but also its attractive long-term development, since ACV is the sole airport operator of Vietnam. As such, we reiterate BUY recommendation on ACV with a TP of VND 96,900 based on DCF approach, offering 24% of expected return as of June 16th, 2023.
Airports Corp Of Viet Nam. Airports Corporation of Viet Nam (ACV) is a Vietnam-based company primarily engaged in airport operation sector. Its leading business activities include the development, operation and maintenance of airport infrastructure and facilities such as runways, apron areas, taxiways, aircraft hangars, lighting systems, air traffic control towers and meteorological offices, among others. The Company provides ground services, including luggage handling, freight loading and unloading, passengers and baggage check-ins, as well as transportation from terminals to aircrafts; aircraft towing, marshalling, guarding, and securities scanning services. ACV is also engaged in the leasing of office, retail, advertising and parking spaces, along with the operation of its own souvenir and liquor shops, restaurants and convenience stores.
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