Auckland International Airport Limited (AIA)

[Sir Ten]

Assuming the issue is oversubscribed I would expect scaling to be based on shareholdings unless there is something contrary in the Term and Conditions of the Offer Document.

"Auckland Airport is seeking to raise up to NZ$200 million under this SPP. AucklandAirport may accept applications for up to NZ$200 million of Shares in aggregate. IfAuckland Airport receives applications for Shares in excess of the total amount of theOffer, applications will be scaled down. Auckland Airport will scale back the number ofShares to be allotted under this SPP to each Applicant by reference to the shareholders’holding of Shares at the Record Date of the Offer (see clause 3 of the Terms andConditions for more information about scaling)."

[value_investor]

I sold my shares of AIA late last year and at this point, I wouldn't consider getting in unless it goes into the sub $4 category. Even then, other stocks may present it self.

The categorisation of it as a true monopoly I think is a bit false. I do believe it from a competitive point of view, because of the capital expenditure required to enter the market. However, monopolies are able to set their own prices with consumers unable to switch alternative. The second part is true but AIA doesn't set their own prices, the Commerce Commission was able to regulate it down on their pricing, which I thought was incredibly reasonable in the initial instance by AIA considering the CAPEX cost.

https://comcom.govt.nz/news-and-medi...ay-be-too-high

Also on the high Capex costs, these are always going to be necessary to the business. Those who think, "They just need to get past this phase and they will be back" would be misled (considering they already pay 100% of underlying profit anyways). The return on invested capital is not desirable for me, and I'm sure building cost inflation is much higher than regular inflation.

I'm not saying its not a attractive company to invest in, I think AIA is a well run business but I would not personally pay such a high multiple for a complex business that won't make the satisfactory returns.

[Joshuatree]

Diversified Revenue and a large Landbank to develop properties and longterm passenger numbers projected to double at the gateway to NZ

FY20 Interim results

Aeronautical
$151.9m revenue (3.6%)
New direct routes to Seoul and Vancouver. Moderating PAX growth:
(0.1%) International (1.2%) Domestic 2.7% Transits


Retail
$113.6m revenue 2.5%
Solid, resilient income growth and diversification:
$20.42 income per passenger 4.6% uplift in international PSR 28% increase in off airport sales


Transport
$34.3m revenue 4.3%
Capacity led revenue growth reflecting strong demand:
8.1% increase in capacity1 (3.6%) ARPS decrease


Hotels
$20.9m revenue2 5.5%
Increasing demand: ~96% occupancy
2% uplift in average room rate


Queenstown
$29.1m revenue 15.0%
Strong passenger growth: 17.1% International 1.3% Domestic

Property
$45.9m revenue 6.0%
Accelerating momentum: $300m+ under construction $105m rent roll 99.4% occupancy


020

Diversified, resilient and growing revenues

I also read this elsewhere, havnt verified it

"AIA clips the ticket once on something like 95% of all the air freight that enters NZ, and it clips the ticket twice on about half that freight, and three times on about one-quarter of it."

[macduffy]

Diversified Revenue and a large Landbank to develop properties and longterm passenger numbers projected to double at the gateway to NZ

Yes, but the timing of this "projection" has now been disrupted by Covid-19. Nevertheless, I hold and expect to take up a few more in the SPP.

[horus1]

I read the article by the CEO about a bubble withAU soon. The guy is on another planet, no reality. Pursueded me to not put in for any shares in the issue even though I own a few.

[Crypto Crude]

The fact that the SP now is $5.48 and the SPP is at $4.66 means that it is inevitable that there will be huge scaling.

Over time the price trends closer to SPP value .. but sure, while there is margin there is profit...
The company is rhetorically saying look here the value of the company is $4.66 per share ...
cc

[voltage]

With the capital raising will the share price get diluted?

[percy]

With the capital raising will the share price get diluted?

Think of your glass of whiskey.
Pour whiskey into a glass................You can now drink it neat.
Add water to the glass....................You have now diluted it.
Same with shares..........................The more you add, the more diluted your shareholding becomes.

PS,
If you drink the whole bottle yourself,you have drunk 100% of the bottle.
Share the bottle with 5 friends you will only have drunk 20%.

[voltage]

So, does that mean if I take up the offer, i will not be making $1 a share on present price?

[macduffy]

Over time the price trends closer to SPP value .. but sure, while there is margin there is profit...
The company is rhetorically saying look here the value of the company is $4.66 per share ...
cc

No, I think the company is saying "That's the price to pitch this at to make sure it takes off!"