Company Guide Version13 | Bloomberg: AOT TB | Reuters: AOT.BK Refer to important disclosures at the end of this report

DBS Group Research . Equity 28 May 2018

Strengthening its long-term growth profile

BUY Boosting long-term growth. Airports of Thailand (AOT) is currently Last Traded Price ( 25 May 2018): Bt69.00 (SET : 1,741.21) facing capacity constraints at some of its airports which may cap short- Price Target 12-mth: Bt75.00 (9% upside) term growth. However, several factors such as airport capacity expansion, new duty free/commercial concessions, airport city projects Analyst and managing additional airports under the Department of Airports will Namida ARTISPONG +66 2857 7833 [email protected] underpin its long-term growth.

Airport city project will be a new era for AOT. AOT plans to What’s New initially develop its 286-acre of freehold land around Suvarnabhumi • Expecting strong international passenger growth (BKK) airport and will be calling for bids by developers in March-April 2019. Some of the major projects anticipated at this site include hotel, • city project will generate future logistic park, business park, shopping mall, recreation, exhibition hall, revenue residence, sport facilities, medical facilities and others. Overall, we are positive on the airport city project as it may generate further earnings • Proposal to manage four additional regional airports for AOT in the future. However, it might take a few years for revenue and building second airports in Chiangmai and Phuket from this project to start flowing in.

Second airports at Chiangmai and Phuket. The investment cost for these two new airports is estimated to be Bt120bn (Bt60bn each). Price Relative Each location is about 20-30km away from the existing airports and will have a capacity of 10m passengers per annum (p.a). These two new airports will mainly cater to domestic passengers but would accommodate international passengers as well in the future. The second airports are needed for these two cities due to geographical limitations. AOT expects to propose these investments to the Ministry of Transportation in July. Construction is targeted to begin in 2019 with expected completion in 2025. Where we differ? Good news is not fully priced in. We believe the market has not fully priced in the huge potential from the airport city project. Forecasts and Valuation Potential catalysts. i) Direct play for Thailand’s tourism industry, ii) FY Sep (Btm) 2016A 2017A 2018F 2019F strong passenger traffic growth, iii) managing additional airports, and iv) Revenue 50,962 54,901 64,071 70,223 earnings upside from future airport city project. EBITDA 31,024 33,264 38,150 42,051 Pre-tax Profit 24,171 26,185 32,358 35,430 Valuation: Net Profit 19,318 20,684 25,941 28,407 Our TP is based on DCF (8% WACC, 4% terminal growth). Net Pft (Pre Ex.) 19,482 21,959 25,941 28,407 Net Pft Gth (Pre-ex) (%) 23.7 12.7 18.1 9.5 Key Risks to Our View: EPS (Bt) 1.35 1.45 1.82 1.99 The key risks are a slowdown in Thailand’s tourism industry which may EPS Pre Ex. (Bt) 1.36 1.54 1.82 1.99 dampen passenger traffic, the delay of concession bidding and higher- EPS Gth Pre Ex (%) 24 13 18 10 than-expected investment in Suvarnabhumi Airport phase 2. Diluted EPS (Bt) 1.35 1.45 1.82 1.99 Net DPS (Bt) 0.68 0.50 0.60 0.60 At A Glance BV Per Share (Bt) 8.40 9.20 10.4 11.8 Issued Capital (m shrs) 14,286 PE (X) 51.0 47.7 38.0 34.7 Mkt. Cap (Btm/US$m) 985,713 / 30,873 PE Pre Ex. (X) 50.6 44.9 38.0 34.7 P/Cash Flow (X) 32.5 36.4 34.3 29.3 Major Shareholders (%) EV/EBITDA (X) 30.9 28.3 24.8 22.3 Ministry Of Finance 70.0 Net Div Yield (%) 1.0 0.7 0.9 0.9 Thai NVDR 5.0 P/Book Value (X) 8.2 7.5 6.6 5.8 State Street Bank Europe Limited 1.9 Net Debt/Equity (X) CASH CASH CASH CASH Free Float (%) 22.1 ROAE (%) 16.9 16.5 18.5 17.9 3m Avg. Daily Val (US$m) 62.3

Earnings Rev (%): 0 0 0 ICB Industry : Industrials / Industrial Transportation Consensus EPS (Bt): N/A 1.78 1.96 Other Broker Recs: B: 12 S: 6 H: 12 Source of all data on this page: Company, DBSVTH, Bloomberg Finance L.P

ed: kk / sa:PY, CS Company Guide Airports of Thailand

WHAT’S NEW Strengthening its long-term growth

Changing landscape toward stronger international passenger. Suvarnabhumi airport city project will be a new era for AOT. Due to a low base caused by the crackdown on Chinese zero- AOT plans to develop two parcels of land around dollar tours, we expect passenger traffic to grow at double- Suvarnabhumi airport (total 566 acres - 280 acres and 286 digits in FY18F. Passenger growth should continue with larger acres respectively). The 280-acre land is leased from the aircraft for international flights. International tourist arrivals Treasury Department and equipped with infrastructure such growth should outpace domestic travel, especially at Don as utilities and roads. The 286-acre freehold land is owned by Muang and Suvarnabhumi airports. AOT but does not have infrastructure yet. It expects to develop the freehold parcel of land first and open bidding to There has been strong growth in international flights and developers in March-April 2019. Projects anticipated at this passengers. At Don Muang airport, more airlines have site include hotel, logistic park, business park, shopping mall, switched from domestic to international slots due to higher recreation, exhibition hall, residence, sport facilities, medical demand. The UN International Civil Aviation Organization’s facilities and others. Overall, we are positive on the airport (ICAO) has also lifted the red flag over Thailand allowing Thai city project as it would generate further earnings for AOT in airlines to add more routes. The same trend has also been the future, although it might take a few years before revenue seen at the Suvarnabhumi airport. During the crackdown of kicks in. Chinese zero-dollar tours, Russian and Indian flights took over Chinese slots. After the crackdown, the only slots available to Eyeing four additional airports. The proposal for AOT to Chinese flights were off-peak slots. These helped AOT to manage four airports – Udonthani, Sakonnakorn, Tak, and grow international passengers during off-peak season. Chumporn – was presented to AOT’s board of directors (BOD) in April. It will be submitted to the Ministry of

Transportation in June and to the Cabinet in September for AOT sees this trend sustaining in the long term because final approval. We expect these projects to sustain AOT’s international tourists are increasing, especially Chinese long-term future growth. These four airports are now tourists. The outbound market currently accounts for only operated by the Department of Airports. Initial development 10% of total Chinese tourism and only 6% of Chinese plans for these airports are as follows; citizens possess passports. This implies huge potential growth - Udonthani Airport: This will be the first among the four in the future. airports to be developed. AOT estimates capex of Bt1bn The strong growth in international passengers would benefit to improve and upgrade passenger terminals, facilities AOT as they generate higher yields than domestic travelers and equipment. The Udonthani airport should be (Bt700 service charge per international passenger vs Bt100 for allocated the most capex due to expectations that it will domestic passenger). yield the highest returns. This will be developed into an international airport for north and will

handle direct international flights, for example those AOT: Increasing international passengers from Europe. Once upgraded, AOT will also be able to collect service charges from international passengers, similar to the Suvarnabhumi Airport (at Bt700 per international passenger). The “shadow demand” or connecting passengers from this international airport would also free up Suvarnabhumi and Don Muang airports’ capacities. Currently, about 446,161 passengers p.a. use Udonthani Airport as a connecting hub. - Sakonnakorn Airport: This airport will be developed into a spoke airport to support flights from nearby cities with investment cost of c.Bt10-100m. The shadow demand is estimated to be about 123,239 passengers p.a.

Source of all data: Company, DBSVTH - Tak and Chumporn Airports: There are no investment plans for now. Note that is not under operation as it has been used for an artificial rain project.

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Company Guide Airports of Thailand

Plans for second airports in Chiangmai and Phuket. The Airports in Thailand investment cost for these two new airports is estimated to be Bt120bn (Bt60bn each). Each location is about 20-30km away from the existing airports and will have a capacity of 10m p.a. These two new airports will mainly cater to domestic passengers but would also accommodate international passengers in the future. These airports are needed for the two cities due to geographical limitations. AOT expects to propose these investments to the Ministry of Transportation in July. Construction is targeted to begin in 2019 with completion expected in 2025. Capacities of AOT’s airports

Source of all data: Company, DBSVTH

Source of all data: Company, DBSVTH

Thailand: Passenger capacity (yearly) of regional airports in Thailand Demand Region Airport Connecting Direct Total (Shadow demand) Nan Nakhon airport 244,221 158,610 402,831 North 214,768 78,033 292,801 Udon Thani international airport 1,841,909 446,161 2,288,070 Ubon Ratchathani international airport 1,220,994 414,373 1,635,367 1,222,859 398,954 1,621,813 North-East 228,098 166,358 394,456 Sakhon Nakhon airport 256,713 123,239 379,952 Roi Et airort 204,190 142,551 346,741 Central 309,727 176,612 486,339 West 97,484 78,328 175,812 Krabi international airport 2,970,046 872,262 3,842,308 Surat Thani international airport 1,567,539 485,781 2,053,320 South Nakhon Si Thammarat airport 992,388 371,888 1,364,276 449,391 217,822 667,213 183,621 60,728 244,349 Total 12,003,948 4,191,700 16,195,648 25.9% Source of all data: Company, DBSVTH

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Company Guide Airports of Thailand

International aircrafts movement (flts) CRITICAL DATA POINTS TO WATCH

Critical Factors Rising traffic volume. DCA’s (Department of Civil Aviation) approval of a PSC (Passenger Service Charge) hike is expected in FY20F when Suvarnabhumi Airport’s expansion phase 2 is completed. Earnings growth over the next two to three years would be driven by higher passenger throughput and flight traffic at its six airports. Rising air travel demand and expanding airline capacities will support traffic growth. AOT’s passenger and flight traffic have been growing at an average of 12.6% Domestic aircrafts movement (flts) and 12% p.a. respectively in the past five years. We expect them to grow by an average of 8% and 5% respectively this year.

Rise of low-cost carriers. The number of domestic passengers has grown by 8.7% p.a. over FY03-FY10. In the last five years, growth has accelerated to an average of 16.1%. The rise of low-cost carriers offering affordable fares and convenient booking platforms has stimulated domestic demand. Domestic passengers are supporting passenger throughput at AOT’s airports. A similar scenario unfolded when Thailand experienced No. of international passengers political unrest in FY14 but total passenger throughput still grew 1.7% y-o-y despite a 5.7% drop in international passenger traffic.

More commercial space. Terminal 2 at Don Muang Airport opened in December 2015, adding 27,109 sqm (from 6,144 sqm) commercial space to AOT’s rental portfolio. The construction of Phuket Airport was completed in September 2016, doubling the existing commercial area to 10,289 sqm. Commercial space at Suvarnabhumi Airport will also increase by 33% to 40,000 sqm upon completion. This should lift overall No. of domestic passengers concession and retail rental revenues.

Airport expansion to support growth. The Suvarnabhumi Airport phase 2 development with an investment budget of Bt62.5bn kicked off in September 2016. Upon completion in 2019, the airport’s capacity will increase from 45m to 60m. AOT is planning to build terminal 2 at the airport with capacity rising to 90m in 2021. It is also constructing a third runway which will lead to flight capacity rising from 68 to 94 flights per hour in 2020. Revenue breakdown 100% 90% 23% 25% 26% 27% 27% 27% 80% 70% 11% 10% 11% 10% 12% 13% 5% 60% 5% 5% 4% 4% 2% 1% 1%4% 50% 2% 2% 2% 40% 43% 45% 43% 45% 43% 30% 42% 20% 10% 16% 13% 14% 13% 13% 12% 0% FY12 FY13 FY14 FY15 FY16 FY17

Landing and parking charges Passenger service charges Aircraft service charges Office and state property rents Service revenues Concession revenues

Source: Company, DBSVTH

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Company Guide Airports of Thailand

Leverage & Asset Turnover (x) Balance Sheet: Low leverage. AOT has healthy operating and free cash flows with a low gearing of 0.2x as at end-1QFY18. The bulk of its long-term loans are in Japanese yen from financial institutions overseas. AOT has hedged 93.4% of total loans with cross currency swap contracts. The Suvarnabhumi Airport phase 2 development should be sufficiently funded by internal cash flow and debt.

Share Price Drivers: Airport city project in the pipeline. AOT is calling for bids next Capital Expenditure year to develop 600-700 acres of land around Suvarnabhumi Airport. This utilisation of undeveloped land will strengthen AOT’s Return on Assets (ROA) while also providing earnings upside.

Key Risks: Slowdown in tourism. AOT's earnings are driven by flight and passenger traffic volumes in Thailand. An economic slowdown, natural disasters and political uncertainty could dampen air traffic and are the main threats to its operations. ROE (%) Company Background Airports of Thailand Public Company Ltd. (AOT) is a state- owned enterprise which operates six major airports in Thailand – Suvarnabhumi, Don Muang, Phuket, Chiang Rai, Chiang Mai and Had Yai. AOT’s airports account for over 90% of Thailand’s air traffic. Most of the other airports in Thailand are located in second-tier cities are much smaller in scale and are owned by the Department of Civil Aviation (DCA), Royal Thai Navy and Bangkok Airways Company.

Forward PE Band (x)

PB Band (x)

Source: Company, DBSVTH

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Company Guide Airports of Thailand

Key Assumptions FY Sep 2015A 2016A 2017A 2018F 2019F

International aircrafts 365,321 402,720 415,662 457,229 482,377 movement Domestic aircrafts(flts) 342,041 374,200 407,903 416,062 426,464 movement No. of international (flts) 60,296 67,129 71,691 83,875 91,309 passengers No. of domestic 45,436 51,832 56,621 59,544 65,645 passengers

Income Statement (Btm) FY Sep 2015A 2016A 2017A 2018F 2019F

Revenue 43,969 50,962 54,901 64,071 70,223 Cost of Goods Sold (15,805) (17,020) (17,410) (20,458) (22,781) Gross Profit 28,164 33,942 37,491 43,613 47,443 Other Opng (Exp)/Inc (7,734) (9,587) (10,236) (11,917) (12,991) Operating Profit 20,430 24,355 27,255 31,696 34,451 Other Non Opg (Exp)/Inc 262 265 364 401 441 Associates & JV Inc 0.0 0.0 0.0 0.0 0.0 Net Interest (Exp)/Inc (330) (285) (159) 261 538 Exceptional Gain/(Loss) 2,974 (163) (1,275) 0.0 0.0 Pre-tax Profit 23,335 24,171 26,185 32,358 35,430 Tax (4,585) (4,821) (5,445) (6,358) (6,962) Minority Interest (21.4) (32.1) (56.0) (58.8) (61.7) Preference Dividend 0.0 0.0 0.0 0.0 0.0 Net Profit 18,729 19,318 20,684 25,941 28,407 Net Profit before Except. 15,755 19,482 21,959 25,941 28,407 EBITDA 26,880 31,024 33,264 38,150 42,051 Growth Revenue Gth (%) 17.0 15.9 7.7 16.7 9.6 EBITDA Gth (%) 27.0 15.4 7.2 14.7 10.2 Opg Profit Gth (%) 35.4 19.2 11.9 16.3 8.7 Net Profit Gth (Pre-ex) (%) 31.0 23.7 12.7 18.1 9.5 Margins & Ratio Gross Margins (%) 64.1 66.6 68.3 68.1 67.6 Opg Profit Margin (%) 46.5 47.8 49.6 49.5 49.1 Net Profit Margin (%) 42.6 37.9 37.7 40.5 40.5 ROAE (%) 18.2 16.9 16.5 18.5 17.9 ROA (%) 12.0 11.6 11.8 14.0 14.3 ROCE (%) 11.4 12.8 13.5 15.1 15.0 Div Payout Ratio (%) 38.1 50.5 34.5 33.0 30.2 Net Interest Cover (x) 61.9 85.3 171.6 NM NM Source: Company, DBSVTH

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Company Guide Airports of Thailand

Quarterly / Interim Income Statement (Btm) FY Sep 2Q2017 3Q2017 4Q2017 1Q2018 2Q2018

Revenue 14,665 13,503 14,120 14,612 16,317 Cost of Goods Sold (4,099) (4,282) (5,162) (4,384) (4,567) Gross Profit 10,566 9,221 8,958 10,229 11,750 Other Oper. (Exp)/Inc (1,961) (1,966) (2,009) (2,022) (2,115) Operating Profit 8,605 7,256 6,948 8,207 9,635 Other Non Opg (Exp)/Inc (497) (471) (525) (406) (578) Associates & JV Inc 0.0 0.0 0.0 0.0 0.0 Net Interest (Exp)/Inc (48.8) (36.1) (21.1) 2.47 (14.3) Exceptional Gain/(Loss) 38.4 (1.3) (1,479) (16.2) 50.3 Pre-tax Profit 8,098 6,747 4,923 7,786 9,093 Tax (1,609) (1,342) (1,175) (1,549) (1,803) Minority Interest (18.4) (7.1) (16.2) (18.2) (17.7) Net Profit 6,470 5,398 3,731 6,220 7,273 Net profit bef Except. 6,432 5,399 5,210 6,236 7,222 EBITDA 9,492 8,173 7,866 9,176 10,429

Growth Revenue Gth (%) 16.3 (7.9) 4.6 3.5 11.7 EBITDA Gth (%) 22.8 (13.9) (3.8) 16.7 13.7 Opg Profit Gth (%) 25.9 (15.7) (4.2) 18.1 17.4 Net Profit Gth (Pre-ex) (%) 30.8 (16.0) (3.5) 19.7 15.8 Margins Gross Margins (%) 72.0 68.3 63.4 70.0 72.0 Opg Profit Margins (%) 58.7 53.7 49.2 56.2 59.1 Net Profit Margins (%) 44.1 40.0 26.4 42.6 44.6

Balance Sheet (Btm) FY Sep 2015A 2016A 2017A 2018F 2019F

Net Fixed Assets 95,253 91,692 93,625 112,411 125,614 Invts in Associates & JVs 0.0 0.0 0.0 0.0 0.0 Other LT Assets 12,446 16,366 13,129 12,816 12,478 Cash & ST Invts 48,490 60,490 67,672 61,245 64,678 Inventory 238 261 277 291 306 Debtors 2,356 2,871 3,069 3,511 3,848 Other Current Assets 841 535 637 650 663 Total Assets 159,624 172,216 178,410 190,924 207,587

ST Debt 4,228 4,797 4,282 3,419 2,914 Creditor 1,151 1,370 1,955 1,324 1,463 Other Current Liab 10,476 13,526 14,492 13,767 13,079 LT Debt 28,202 27,261 19,609 16,684 14,505 Other LT Liabilities 6,755 4,949 6,384 6,384 6,384 Shareholder’s Equity 108,588 120,058 131,376 148,975 168,810 Minority Interests 225 257 312 371 433 Total Cap. & Liab. 159,624 172,216 178,410 190,924 207,587

Non-Cash Wkg. Capital (8,192) (11,229) (12,463) (10,639) (9,725) Net Cash/(Debt) 16,060 28,433 43,781 41,143 47,259 Debtors Turn (avg days) 18.5 18.7 19.7 18.7 19.1 Creditors Turn (avg days) 49.2 43.3 51.6 41.5 32.6 Inventory Turn (avg days) 8.2 8.6 8.4 7.2 7.0 Asset Turnover (x) 0.3 0.3 0.3 0.3 0.4 Current Ratio (x) 3.3 3.3 3.5 3.5 4.0 Quick Ratio (x) 3.2 3.2 3.4 3.5 3.9 Net Debt/Equity (X) CASH CASH CASH CASH CASH Net Debt/Equity ex MI (X) CASH CASH CASH CASH CASH Capex to Debt (%) 21.3 15.1 22.2 114.4 109.1 Z-Score (X) 13.2 13.2 14.6 16.2 17.5

Source: Company, DBSVTH

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Company Guide Airports of Thailand

Cash Flow Statement (Btm) FY Sep 2015A 2016A 2017A 2018F 2019F

Pre-Tax Profit 23,335 24,171 26,185 32,358 35,430 Dep. & Amort. 6,189 6,405 5,646 6,054 7,160 Tax Paid 3,007 4,585 4,821 5,445 6,358 Assoc. & JV Inc/(loss) 0.0 0.0 0.0 0.0 0.0 Chg in Wkg.Cap. 9,571 (1,990) 5,207 (1,510) (577) Other Operating CF (17,195) (2,845) (14,755) (13,639) (14,682) Net Operating CF 24,907 30,327 27,103 28,708 33,689 Capital Exp.(net) (6,919) (4,850) (5,312) (23,000) (19,000) Other Invts.(net) (9,250) (9,900) (3,050) 0.0 0.0 Invts in Assoc. & JV 0.0 0.0 0.0 0.0 0.0 Div from Assoc & JV 0.0 0.0 0.0 0.0 0.0 Other Investing CF 90.3 27.3 (61.7) (61.7) (61.7) Net Investing CF (16,079) (14,722) (8,423) (23,062) (19,062) Div Paid (7,057) (7,142) (9,757) (7,143) (8,571) Chg in Gross Debt (1,952) (557) (7,724) (3,788) (2,684) Capital Issues 0.0 0.0 0.0 0.0 0.0 Other Financing CF (3,781) (5,104) 2,233 (1,141) 61.7 Net Financing CF (12,790) (12,803) (15,247) (12,072) (11,193) Currency Adjustments 0.0 0.0 0.0 0.0 0.0 Chg in Cash (3,962) 2,801 3,432 (6,426) 3,434 Opg CFPS (Bt) 1.07 2.26 1.53 2.12 2.40 Free CFPS (Bt) 1.26 1.78 1.53 0.40 1.03 Source: Company, DBSVTH

Target Price & Ratings History

Source: DBSVTH Analyst: Namida ARTISPONG

THAI-CAC Declared Corporate Governance CG Rating (as of Feb 2018)

THAI-CAC is Companies participating in Thailand's Private Sector Score Description Collective Action Coalition Against Corruption programme (Thai Declared Companies that have declared their intention to join CAC CAC) under Thai Institute of Directors (as of Feb 2018) are Certified Companies certified by CAC. categorised into: Score Range Number of Logo Description Corporate Governance CG Rating is based on Thai Institute of 90-100 Excellent Directors (IOD)’s annual assessment of corporate governance 80-89 Very Good practices of listed companies. The assessment covers 235 criteria in five categories including board responsibilities (35% weighting), 70-79 Good disclosure and transparency (20%), role of stakeholders (20%), 60-69 Satisfactory equitable treatment of shareholders (10%) and rights of shareholders (15%). The IOD then assigns numbers of logos to 50-59 Pass each company based on their scoring as follows: <50 No logo given N/A

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Company Guide Airports of Thailand

DBSVTH recommendations are based an Absolute Total Return* Rating system, defined as follows: STRONG BUY (>20% total return over the next 3 months, with identifiable share price catalysts within this time frame) BUY (>15% total return over the next 12 months for small caps, >10% for large caps) HOLD (-10% to +15% total return over the next 12 months for small caps, -10% to +10% for large caps) FULLY VALUED (negative total return i.e. > -10% over the next 12 months) SELL (negative total return of > -20% over the next 3 months, with identifiable catalysts within this time frame) Share price appreciation + dividends

Completed Date: 28 May 2018 10:49:28 (THA) Dissemination Date: 28 May 2018 11:18:10 (THA)

Sources for all charts and tables are DBSVTH unless otherwise specified.

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The research set out in this report is based on information obtained from sources believed to be reliable, but we (which collectively refers to DBS Bank Ltd, its respective connected and associated corporations, affiliates and their respective directors, officers, employees and agents (collectively, the “DBS Group”) have not conducted due diligence on any of the companies, verified any information or sources or taken into account any other factors which we may consider to be relevant or appropriate in preparing the research. Accordingly, we do not make any representation or warranty as to the accuracy, completeness or correctness of the research set out in this report. Opinions expressed are subject to change without notice. This research is prepared for general circulation. Any recommendation contained in this document does not have regard to the specific investment objectives, financial situation and the particular needs of any specific addressee. This document is for the information of addressees only and is not to be taken in substitution for the exercise of judgement by addressees, who should obtain separate independent legal or financial advice. The DBS Group accepts no liability whatsoever for any direct, indirect and/or consequential loss (including any claims for loss of profit) arising from any use of and/or reliance upon this document and/or further communication given in relation to this document. This document is not to be construed as an offer or a solicitation of an offer to buy or sell any securities. The DBS Group, along with its affiliates and/or persons associated with any of them may from time to time have interests in the securities mentioned in this document. The DBS Group, may have positions in, and may effect transactions in securities mentioned herein and may also perform or seek to perform broking, investment banking and other banking services for these companies.

Any valuations, opinions, estimates, forecasts, ratings or risk assessments herein constitutes a judgment as of the date of this report, and there can be no assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments. The information in this document is subject to change without notice, its accuracy is not guaranteed, it may be incomplete or condensed, it may not contain all material information concerning the company (or companies) referred to in this report and the DBS Group is under no obligation to update the information in this report.

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The valuations, opinions, estimates, forecasts, ratings or risk assessments described in this report were based upon a number of estimates and assumptions and are inherently subject to significant uncertainties and contingencies. It can be expected that one or more of the estimates on which the valuations, opinions, estimates, forecasts, ratings or risk assessments were based will not materialize or will vary significantly from actual results. Therefore, the inclusion of the valuations, opinions, estimates, forecasts, ratings or risk assessments described herein IS NOT TO BE RELIED UPON as a representation and/or warranty by the DBS Group (and/or any persons associated with the aforesaid entities), that:

(a) such valuations, opinions, estimates, forecasts, ratings or risk assessments or their underlying assumptions will be achieved, and (b) there is any assurance that future results or events will be consistent with any such valuations, opinions, estimates, forecasts, ratings or risk assessments stated therein.

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Company Guide Airports of Thailand

DBSVUSA, a US-registered broker-dealer, does not have its own investment banking or research department, has not participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months and does not engage in market-making.

ANALYST CERTIFICATION The research analyst(s) primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views. The analyst(s) also certifies that no part of his/her compensation was, is, or will be, directly or indirectly, related to specific recommendations or views expressed in the report. The research analyst (s) primarily responsible for the content of this research report, in part or in whole, certifies that he or his associate1 does not serve as an officer of the issuer or the new listing applicant (which includes in the case of a real estate investment trust, an officer of the management company of the real estate investment trust; and in the case of any other entity, an officer or its equivalent counterparty of the entity who is responsible for the management of the issuer or the new listing applicant) and the research analyst(s) primarily responsible for the content of this research report or 2 his associate does not have financial interests in relation to an issuer or a new listing applicant that the analyst reviews. DBS Group has procedures in place to eliminate, avoid and manage any potential conflicts of interests that may arise in connection with the production of research reports. The research analyst(s) responsible for this report operates as part of a separate and independent team to the investment banking function of the DBS Group and procedures are in place to ensure that confidential information held by either the research or investment banking function is handled appropriately. There is no direct link of DBS Group's compensation to any specific investment banking function of the DBS Group.

COMPANY-SPECIFIC / REGULATORY DISCLOSURES 1. DBS Bank Ltd, DBS HK, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), DBSV HK or their subsidiaries and/or other affiliates have a proprietary position in Airports of Thailand recommended in this report as of 30 Apr 2018. 2. Neither DBS Bank Ltd, DBS HK nor DBSV HK market makes in equity securities of the issuer(s) or company(ies) mentioned in this Research Report.

Compensation for investment banking services: 3. DBSVUSA does not have its own investment banking or research department, nor has it participated in any public offering of securities as a manager or co-manager or in any other investment banking transaction in the past twelve months. Any US persons wishing to obtain further information, including any clarification on disclosures in this disclaimer, or to effect a transaction in any security discussed in this document should contact DBSVUSA exclusively.

Directorship/trustee interests:

Disclosure of previous investment recommendation produced: 4. DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates may have published other investment recommendations in respect of the same securities / instruments recommended in this research report during the preceding 12 months. Please contact the primary analyst listed in the first page of this report to view previous investment recommendations published by DBS Bank Ltd, DBS Vickers Securities (Singapore) Pte Ltd (''DBSVS''), their subsidiaries and/or other affiliates in the preceding 12 months.

1 An associate is defined as (i) the spouse, or any minor child (natural or adopted) or minor step-child, of the analyst; (ii) the trustee of a trust of which the analyst, his spouse, minor child (natural or adopted) or minor step-child, is a beneficiary or discretionary object; or (iii) another person accustomed or obliged to act in accordance with the directions or instructions of the analyst. 2 Financial interest is defined as interests that are commonly known financial interest, such as investment in the securities in respect of an issuer or a new listing applicant, or financial accommodation arrangement between the issuer or the new listing applicant and the firm or analysis. This term does not include commercial lending conducted at arm's length, or investments in any collective investment scheme other than an issuer or new listing applicant notwithstanding the fact that the scheme has investments in securities in respect of an issuer or a new listing applicant.

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RESTRICTIONS ON DISTRIBUTION General This report is not directed to, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in any locality, state, country or other jurisdiction where such distribution, publication, availability or use would be contrary to law or regulation.

Australia This report is being distributed in Australia by DBS Bank Ltd. (“DBS”) or DBS Vickers Securities (Singapore) Pte Ltd (“DBSVS”). DBS holds Australian Financial Services Licence no. 475946.

DBSVS is exempted from the requirement to hold an Australian Financial Services Licence under the Corporation Act 2001 (“CA”) in respect of financial services provided to the recipients. DBSVS is regulated by the Monetary Authority of Singapore under the laws of Singapore, which differ from Australian laws.

Distribution of this report is intended only for “wholesale investors” within the meaning of the CA.

Hong Kong This report has been prepared by an entity(ies) which is not licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). This report is being distributed in Hong Kong and is attributable to DBS Vickers Hong Kong Limited, a licensed corporation licensed by the Hong Kong Securities and Futures Commission to carry on the regulated activity of advising on securities pursuant to the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong).

For any query regarding the materials herein, please contact Paul Yong (CE. No. ASE988) at [email protected].

Indonesia This report is being distributed in Indonesia by PT DBS Vickers Sekuritas Indonesia.

Malaysia This report is distributed in Malaysia by AllianceDBS Research Sdn Bhd ("ADBSR"). Recipients of this report, received from ADBSR are to contact the undersigned at 603-2604 3333 in respect of any matters arising from or in connection with this report. In addition to the General Disclosure/Disclaimer found at the preceding page, recipients of this report are advised that ADBSR (the preparer of this report), its holding company Alliance Investment Bank Berhad, their respective connected and associated corporations, affiliates, their directors, officers, employees, agents and parties related or associated with any of them may have positions in, and may effect transactions in the securities mentioned herein and may also perform or seek to perform broking, investment banking/corporate advisory and other services for the subject companies. They may also have received compensation and/or seek to obtain compensation for broking, investment banking/corporate advisory and other services from the subject companies.

Wong Ming Tek, Executive Director, ADBSR

Singapore This report is distributed in Singapore by DBS Bank Ltd (Company Regn. No. 196800306E) or DBSVS (Company Regn No. 198600294G), both of which are Exempt Financial Advisers as defined in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. DBS Bank Ltd and/or DBSVS, may distribute reports produced by its respective foreign entities, affiliates or other foreign research houses pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, DBS Bank Ltd accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact DBS Bank Ltd at 6327 2288 for matters arising from, or in connection with the report.

Thailand This report is being distributed in Thailand by DBS Vickers Securities (Thailand) Co Ltd.

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United This report is produced by DBS Vickers Securities (Thailand) Co Ltd which is regulated by the Securities and Exchange Kingdom Commission, Thailand.

This report is disseminated in the United Kingdom by DBS Vickers Securities (UK) Ltd, ("DBSVUK"). DBSVUK is authorised and regulated by the Financial Conduct Authority in the United Kingdom.

In respect of the United Kingdom, this report is solely intended for the clients of DBSVUK, its respective connected and associated corporations and affiliates only and no part of this document may be (i) copied, photocopied or duplicated in any form or by any means or (ii) redistributed without the prior written consent of DBSVUK. This communication is directed at persons having professional experience in matters relating to investments. Any investment activity following from this communication will only be engaged in with such persons. Persons who do not have professional experience in matters relating to investments should not rely on this communication.

Dubai This research report is being distributed by DBS Bank Ltd., (DIFC Branch) having its office at PO Box 506538, 3rd Floor, International Building 3, East Wing, Gate Precinct, Dubai International Financial Centre (DIFC), Dubai, United Arab Emirates. DBS Bank Financial Ltd., (DIFC Branch) is regulated by The Dubai Financial Services Authority. This research report is intended only for Centre professional clients (as defined in the DFSA rulebook) and no other person may act upon it.

United Arab This report is provided by DBS Bank Ltd (Company Regn. No. 196800306E) which is an Exempt Financial Adviser as defined Emirates in the Financial Advisers Act and regulated by the Monetary Authority of Singapore. This report is for information purposes only and should not be relied upon or acted on by the recipient or considered as a solicitation or inducement to buy or sell any financial product. It does not constitute a personal recommendation or take into account the particular investment objectives, financial situation, or needs of individual clients. You should contact your relationship manager or investment adviser if you need advice on the merits of buying, selling or holding a particular investment. You should note that the information in this report may be out of date and it is not represented or warranted to be accurate, timely or complete. This report or any portion thereof may not be reprinted, sold or redistributed without our written consent.

United States This report was prepared by DBS Vickers Securities (Thailand) Co Ltd (''DBSVTH''). DBSVUSA did not participate in its preparation. The research analyst(s) named on this report are not registered as research analysts with FINRA and are not associated persons of DBSVUSA. The research analyst(s) are not subject to FINRA Rule 2241 restrictions on analyst compensation, communications with a subject company, public appearances and trading securities held by a research analyst. This report is being distributed in the United States by DBSVUSA, which accepts responsibility for its contents. This report may only be distributed to Major U.S. Institutional Investors (as defined in SEC Rule 15a-6) and to such other institutional investors and qualified persons as DBSVUSA may authorize. Any U.S. person receiving this report who wishes to effect transactions in any securities referred to herein should contact DBSVUSA directly and not its affiliate.

Other In any other jurisdictions, except if otherwise restricted by laws or regulations, this report is intended only for qualified, jurisdictions professional, institutional or sophisticated investors as defined in the laws and regulations of such jurisdictions.

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DBS Regional Research Offices

HONG KONG MALAYSIA SINGAPORE DBS Vickers (Hong Kong) Ltd AllianceDBS Research Sdn Bhd DBS Bank Ltd Contact: Paul Yong Contact: Wong Ming Tek (128540 U) Contact: Janice Chua 18th Floor Man Yee Building 19th Floor, Menara Multi-Purpose, 12 Marina Boulevard, 68 Des Voeux Road Central Capital Square, Marina Bay Financial Centre Tower 3 Central, Hong Kong 8 Jalan Munshi Abdullah 50100 Singapore 018982 Tel: 65 6878 8888 Kuala Lumpur, Malaysia. Tel: 65 6878 8888 Fax: 65 65353 418 Tel.: 603 2604 3333 Fax: 65 65353 418 e-mail: [email protected] Fax: 603 2604 3921 e-mail: [email protected] Participant of the Stock Exchange of Hong Kong e-mail: [email protected] Company Regn. No. 196800306E

INDONESIA THAILAND PT DBS Vickers Sekuritas (Indonesia) DBS Vickers Securities (Thailand) Co Ltd Contact: Maynard Priajaya Arif Contact: Chanpen Sirithanarattanakul DBS Bank Tower 989 Siam Piwat Tower Building, Ciputra World 1, 32/F 9th, 14th-15th Floor Jl. Prof. Dr. Satrio Kav. 3-5 Rama 1 Road, Pathumwan, Jakarta 12940, Indonesia Bangkok Thailand 10330 Tel: 62 21 3003 4900 Tel. 66 2 857 7831 Fax: 6221 3003 4943 Fax: 66 2 658 1269 e-mail: [email protected] e-mail: [email protected] Company Regn. No 0105539127012 Securities and Exchange Commission, Thailand

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