Auckland International Airport Limited (AIA)

[Fortunecookie]

Not a bad idea. A single isle jet optimized airport for ditch crossing and feeding onward flights would have appeal to those residing in the area.

What would make it even more appealing would be a commutator rail service from the Isthmus making it a viable alternative to AIA. The overlords of HLZ should land bank some land beside the rail track at Matangi for a transfer station.

Boop boop de do
Marilyn

You can definitely get some Auckland flyers if there was a viable rail connection.

[SailorRob]

What the hell is the story with this company?

I just glanced over 10 years of financials before looking at the price and I figured I could understand someone paying 3 billion for this (I wouldn't), maybe $2 a share...

12.6 Billion WTF.

Debt and share count going up...

Is this some play on oh NZ will be a bigger company in future etc?

How the hell you gonna make money?

Will it be through EPS growth? If so, will that be margins, revenue or share count reducing?

Or will it be through Multiple expansion?

Or dividends?

For them to grow what capital is required and from where?

Am I on Candid camera?

I guess it's the earnings growth up until 2018 that people see continuing at some point.

[BlackPeter]

What the hell is the story with this company?

I just glanced over 10 years of financials before looking at the price and I figured I could understand someone paying 3 billion for this (I wouldn't), maybe $2 a share...

12.6 Billion WTF.

Debt and share count going up...

Is this some play on oh NZ will be a bigger company in future etc?

How the hell you gonna make money?

Will it be through EPS growth? If so, will that be margins, revenue or share count reducing?

Or will it be through Multiple expansion?

Or dividends?

For them to grow what capital is required and from where?

Am I on Candid camera?

I guess it's the earnings growth up until 2018 that people see continuing at some point.

Good question - I guess AIA is great evidence that the markets are anything but rational.

I suppose punters are blinded by the dollars the company could make with property development (they hold quite a lot of potentially valuable land) and when they see an exponential curve they always think this is a forecast of the future air passenger development.

Obviously - all assuming that Auckland continues bloating, the sea levels wont rise too fast, property values keep ballooning, air traffic keeps rising and no other airport in the upper North Island is emerging (Hamilton?). What could possibly go wrong?

Personally I prefer companies actually making a material amount of money, relative to their capitalisation, but hey - each to their own.

[SailorRob]

Good question - I guess AIA is great evidence that the markets are anything but rational.

I suppose punters are blinded by the dollars the company could make with property development (they hold quite a lot of potentially valuable land) and when they see an exponential curve they always think this is a forecast of the future air passenger development.

Obviously - all assuming that Auckland continues bloating, the sea levels wont rise too fast, property values keep ballooning, air traffic keeps rising and no other airport in the upper North Island is emerging (Hamilton?). What could possibly go wrong?

Personally I prefer companies actually making a material amount of money, relative to their capitalisation, but hey - each to their own.

Well said.

[Rawz]

KFL- why do we invest in AIA:

AIA is well-positioned to benefit from New Zealand’s positive long-term tourism outlook. With aspirations for 40 million total passengers per annum by 2044, combined with a strengthening consumer business and leveraging its land bank, AIA’s non-aeronautical operations are expected to continue to deliver attractive returns on invested capital into the future.

[Fortunecookie]

KFL- why do we invest in AIA:

AIA is well-positioned to benefit from New Zealand’s positive long-term tourism outlook. With aspirations for 40 million total passengers per annum by 2044, combined with a strengthening consumer business and leveraging its land bank, AIA’s non-aeronautical operations are expected to continue to deliver attractive returns on invested capital into the future.

It's basically a REIT with a runaway attached to it.

[Rawz]

Prior to covid AIA book value per share doubled in 5 years. 2014 to 2019....

[Fortunecookie]

Prior to covid AIA book value per share doubled in 5 years. 2014 to 2019....

I don't doubt that and I think it's great. But as a shareholder how do you extract value.

Edit: I just checked. Since inception just over 9% compound return, which is not bad. However not so great the last 5 years. But with the big upgrade, have they under capex previously.

[Rawz]

Last 5 years probably the worst they’ll see until the next pandemic? Just having a random guess but would they be every 100 years or so?

[Fortunecookie]

Last 5 years probably the worst they’ll see until the next pandemic? Just having a random guess but would they be every 100 years or so?

Difficult to say. Too many variables during that timeframe. Apparently the US military have got UFO technology and backwards engineering it as we speak. The US, China and N Korea will come together and use the alien technology to fight the threat of AI. Kidding.

On a serious note, the randomness of covid affected AIA and everyone else. So that explains the results for the last few years. I struggle to forecast beyond 2 years. Too many things can happen in 100 years. Nothing happens in a straight line. For example I wouldnt rule out a international airport in Hamilton.

Edit: I just remembered off the top of my head across the different forms of fossil fuels. Its estimated supplies range from 50 to 80 years worth. Perhaps there won't be a Hamilton airport.