Auckland International Airport Limited (AIA)

**value_investor** · 26-07-2017, 10:29 PM

A lot of press in the news considering a few things. Good to see movement finally on the second runway finally.

The share price has indeed stayed around the $7 mark for the last year, except for a few gains and losses. The PE is just very high and despite the good news rolling on for the company, its really difficult for it to climb at that valuation. Growth is a fantastic thing but additional investment has to keep up at the same pace. Sometimes that can be seen stagnation in the market. Still a decent long term hold but the juice has lost its bubbles a little bit.

**Lewylewylewy** · 27-07-2017, 07:43 AM

Agree completely. I see this share as a low risk for a retirees portfolio.

**value_investor** · 29-08-2017, 09:32 PM

No comments on the recent result huh?
I'll bite with my thoughts.

- Revenue up 9.7% is impressive with growth over all revenue generating areas. 13.8% in the aeronautical space mainly driven by the double digit passenger growth. More flights being put on by Air NZ, and the growth of the international market pleasing for the next FY.

- The mantra of 1m a day being spent is still going with AIA adding more projects than they had this time last year. Good to see a lot of long term ambitions now being written down as goals from the team. AIA not looking to sit still while the growth is happening and the cheap money is available. These projects are very complicated however, and the market will turn in the next 5 FY's.

- AIA are starting to capitalise on diversification through their associate investments. A 25% growth in profit from these a highlight, as well as future plans to possibly increase stakes. Queenstown airport could be one to look out for in future.

- Guidance is very low for the next FY, in the low single digit figures. Normally, they do give a very conservative guidance but this is much lower than past years. Blamed mostly on the aeronautical pricing model going forward.

The market reacted very softly to this one. The PE has gone through a significant re-rating from about 33-35 to now sitting at 24. You're still paying a premium for this one considering the returns are far in the future for now, that paired with the high capital expenditure is the reason for its fall (as well as already being overvalued of course). However, the PE falling even more would make this one a buy for me. Still a bit high on valuation but we're getting there before i'd jump in again.

**macduffy** · 18-09-2017, 10:26 AM

The pipeline issue will get sorted and AIA will be good buying in due course. But the downtrend started about a month ago, about the time of the profit announcement - and that needs to reverse before it gets my serious attention.

**Jonboyz** · 18-09-2017, 09:40 PM

What do you see as a good price to buy in given that this will blow over in a couple of months?

**macduffy** · 19-09-2017, 12:10 PM

Originally Posted by Jonboyz

What do you see as a good price to buy in given that this will blow over in a couple of months?

I wouldn't hazard a guess. Evidence that the downtrend has reversed would be my buy signal.

**macduffy** · 20-09-2017, 02:20 PM

Originally Posted by arc

What do you class as evidence

Consolidation of the very recent SP turnaround and the RSI breaking through the 50 barrier. My TA is very basic!

**peat** · 21-09-2017, 11:32 AM

I had a look at this the other night and found one pattern that I thought was interesting and indicative.
It does however have the bearish fall from 7.75 to fight against so there could be a bit of interesting tension before/if the bullish pattern takes hold.Attachment 9192
Fundamentally , who wouldnt love a monopoly