Samart Aviation Solutions Public Company Limited

DBS Vickers named KTB, TTB and SAV as its top picks today, saying the banking group has a positive sentiment after Fitch Ratings raised Thailand's Outlook to Stable from BBB+/Negative, which could lead to Thai banks' Outlooks being revised up as well. It expects KTB, rated buy with a 50 baht target price, and TTB, rated hold with a 3.20 baht target price, to have a chance of an Outlook upgrade in this round, a sentiment that could push their share prices higher. For SAV, flight trends in the third quarter of 2026 are expected to recover well, with July to August 2026 seen growing 8% and 20% year on year, supported by overflight traffic, especially from Vietnam, while the fourth quarter of 2026 is expected to improve further on the high season. It recommends buying with a 14.50 baht target price and expects third-quarter 2026 profit to improve both year on year and quarter on quarter to about 130 to 140 million baht, while 2027 profit still has upside from Airports of Thailand auction work worth about 1.35 billion baht and a high dividend yield of 8.5%.

Dao Securities said SAV retains a positive view on its operating performance in the third and fourth quarters of 2026, which should return to growth compared with both the prior year and the previous quarter, driven by a recovering trend in flight numbers. In July 2026, flights returned to 8% growth year on year, and in August 2026 growth is expected to accelerate to 20% year on year, while September 2026 should continue to grow. As a result, third-quarter 2026 flight numbers are estimated to grow more than 10% both year on year and quarter on quarter, an improvement from the second quarter of 2026, when flight numbers fell 2% year on year and 12% quarter on quarter. Supporting factors include a recovery in overflight traffic, with particularly notable increases in flights from Vietnam, China and Singapore, and fourth-quarter 2026 flight numbers are expected to rise further during the high season. The brokerage maintained its 2026 profit forecast at 547 million baht, flat year on year, with upside potential, as first-half profit accounted for 48% of the full year. For third-quarter 2026, preliminary estimates put profit improving to 130-140 million baht, better both year on year and quarter on quarter, compared with 128 million baht in the third quarter of 2025 and 122 million baht in the second quarter of 2026. Fourth-quarter 2026 profit is expected to improve further and mark the year's high. Dao maintained its Buy recommendation with a target price of 14.50 baht, based on a DCF with a WACC of 9.5% and a terminal growth rate of 2.5%. It assesses that second-quarter 2026 profit marked the bottom and that growth will accelerate in the third and fourth quarters of 2026 and in 2027. Catalysts remain from project tenders by AOT and Aerothai, with a combined project value of no less than 2.45 billion baht, which should add upside to 2027 profit, while dividend yield remains high at around 8.5% per year.

Siam Aviation Solutions Public Company Limited (SAV) is expected to see a recovery in its performance during the second half of 2026, as flight volumes through Cambodian airspace begin to increase again. The company has opportunities to bid for new projects totaling over 3.2 billion baht. Meanwhile, two brokerages have turned positive and maintained a "Buy" recommendation, with a maximum target price of 18 baht. In the second quarter of 2026, SAV reported a net profit of 122 million baht, down 6% year-on-year, and revenue of 451 million baht, down 5% year-on-year, due to Middle East tensions reducing international flights. However, in July and August, flight volumes through Cambodian airspace increased, particularly from Vietnamese airlines that have adjusted routes to fly more through Cambodia, following Cambodia's reopening of charter flights with China. The company is preparing to bid for the installation of foreign object debris detection systems on runways at Airports of Thailand (AOT), valued at 1.3 billion baht, and the procurement of equipment for Aeronautical Radio of Thailand, valued at 1.9 billion baht, totaling over 3.2 billion baht in projects bid for. Krungsri Securities expects normalized profit for 2026 to be 550 million baht, flat from the previous year, rising to 615 million baht in 2027. Meanwhile, Pi Securities has cut its 2026 profit estimate by 3% to 584 million baht, but still representing 7% growth from the previous year.

SAMART's backlog has increased to approximately 16 billion baht after TEDA secured a high-voltage power station construction project worth 1.1 billion baht. Meanwhile, broker Yuanta maintains its normal profit forecast for 2026 at 730 million baht and keeps a Buy recommendation with a target price of 8.70 baht. The backlog at the end of Q2/2026 stood at 14.9 billion baht, up 3% from the previous quarter, comprising about 8 billion baht from SAMTEL, 6.7 billion baht from the Utility & Transport group, and 154 million baht from SDC. The company aims to increase its year-end backlog to 20 billion baht, with a total of 10 billion baht worth of projects pending bidding in the second half of the year. It also expects SAV to recover seasonally, while TEDA remains a key growth driver.

Krungsri Securities Public Company Limited stated that SAV reported flight volumes through Cambodian airspace in July-August 2026 returned to growth of +8% y-y and +High teen% y-y, respectively, recovering from the -2% y-y decline in 2Q26, supported by flights from China and Vietnam. Meanwhile, there are two new tender projects with a total value of over 3.2 billion baht, including the Safety equipment installation project at Suvarnabhumi Airport (FOD) worth 1.3 billion baht, expected to be tendered in October 2026, and the radar equipment project for Aeronautical Radio of Thailand worth 1.9 billion baht, expected to be tendered in early 2027. The FOD project is a 50/50 joint venture with a partner, with a profit margin of 12-14%, while the radar project has a profit margin of 6-8%. The research department views this as slightly positive for the core business trend recovering in 3Q26F and maintains its 2026F normal profit estimate of 550 million baht, flat y-y, while maintaining a "Buy" recommendation with a 2027F target price of 18.00 baht (DCF, WACC 9.2%). It also points out that the stock trades at a 2026F P/E of approximately 12.8 times, below -1SD, and offers a high dividend yield of 6-8% per year.

SAMART is confident that second-half 2026 performance will accelerate sharply after first-half net profit of about 280 million baht. The company is moving ahead with new bidding worth a combined ten billion baht, lifting backlog from the current sixteen billion baht toward a target of twenty billion baht by the end of 2026. Meanwhile, SAV is poised to rebound in the third quarter of 2026 on lower fuel costs and recovering flights. SAMTEL is preparing to compete for new work worth nearly seven billion baht, while TEDA's strong performance gives profit a chance to beat its target.

Samart Group has announced its business push for the second half of the year, preparing to bid on projects worth more than 10 billion baht in total, with the aim of lifting its backlog to 20 billion baht by year-end. It is also promoting future businesses such as Private AI, Cyber Security, Data Center and EV Charger as new growth engines. Mr. Wattachai Wilailak, Executive Vice President of Corporate at Samart Corporation, said second-quarter results for 2026 showed revenue of 2.838 billion baht and net profit of 141 million baht, allowing the company to deliver net profit for eight consecutive quarters. For the first six months, total revenue was about 5.6 billion baht, up 7.2 percent from a year earlier, while net profit was 280 million baht, up nearly 30 percent from 215 million baht a year earlier. The company is targeting revenue of 13 billion baht this year and aims to double both revenue and profit next year. In the second half, it expects to benefit from the formation of the government and accelerated budget disbursement, which should revive public-sector work, especially auctions from September to December worth about 7.5 billion baht for Samart, with projects including subsidiaries exceeding 10 billion baht. The aviation business SAV has clearly recovered since July, with overflight revenue accounting for about 70 percent of aviation revenue, and the Vietnam market representing nearly 40 percent of all overflight flights, growing about 24 percent from a year earlier. Meanwhile, SDC, which has a contract with the Ministry of Interior and is the source of more than 80 percent of SDC's revenue, will see that contract end in November, with clarity on renewal or a new auction expected in December. The company is also preparing to partner with a Chinese ally to install EV chargers, with an official cooperation announcement planned for early next month, and is moving to expand its customer base to the Ministry of Public Health, as well as taking on construction of electrical substations for data center projects through the Provincial Electricity Authority.

Samart Aviation Solutions Public Company Limited, or SAV, reported a net profit of 122 million baht for the second quarter of 2026, with a normalised profit of 124 million baht, down 19 percent from the previous quarter and 12 percent from a year earlier, roughly in line with market expectations. Total revenue came in at 451 million baht, down 8 percent quarter-on-quarter and 5 percent year-on-year, weighed by the Middle East conflict and a 2 percent appreciation of the baht against the prior year. Total flights numbered 29,700, a decline of 12 percent from the previous quarter and 2 percent from a year ago, with domestic flights down 7 percent and international flights down 17 percent, while overflight traffic was stable. Gross margin stood at 52.9 percent, up from a year earlier, as the share of overflight traffic rose to 74.7 percent. The company declared a first-half dividend of 0.40 baht per share, representing a yield of 3.4 percent, with the XD date set for 20 August 2026. Analysts at Yuanta Securities expect profit to recover in the third quarter of 2026, helped by an easing of Middle East tensions and a 28 percent quarter-on-quarter drop in jet fuel prices. They maintain their 2026 profit forecast at 608 million baht and keep a buy rating with a target price of 16.00 baht.

Dao Securities stated that SAV reported a net profit for the second quarter of 2026 of 122 million baht, down 6 percent from the prior year and 15 percent from the previous quarter, roughly in line with market expectations. Total flight volume slowed to 30,000 flights, down 2 percent from the prior year and 12 percent from the previous quarter, as several airlines worldwide cancelled some flights due to the impact of higher fuel prices. Service revenue was 451 million baht, down 5 percent from the prior year and 8 percent from the previous quarter, in line with flight volume trends. Meanwhile, cost control remained effective, with a gross margin of 52.9 percent, compared with 51.4 percent in the second quarter of 2025 and 52.8 percent in the first quarter of 2026. The analyst maintains the 2026 profit forecast at 547 million baht, flat from the prior year, with first-half profit of 265 million baht, down 2 percent from the prior year, accounting for 48 percent of the full-year estimate. Second-half profit is expected to return to growth from the prior year and the first half, driven by a recovery in flights from seasonal factors and easing fuel prices. Total flight volume in July 2026 returned to growth of 8 percent from the prior year, the first growth in four months. The recommendation remains buy with a target price of 14.50 baht, based on discounted cash flow, with the assessment that second-quarter profit marked the bottom and will accelerate in the third and fourth quarters. Additional support comes from Airports of Thailand's auction and plans to bid for work from Aeronautical Radio of Thailand within 2026, which will enhance sustained profit growth opportunities. A first-half dividend of 0.40 baht per share was announced, representing a dividend yield of 3.4 percent.

SAMART expects the second half of 2026 to accelerate with the gradual signing of large-scale projects, especially from August to November. Key projects awaiting results include an AOT project through SAV worth 1.3 billion baht, a power transmission system for a data center worth 1.1 billion baht, an Interior Ministry project worth 1 billion baht, and other government projects worth 2 to 3 billion baht. The total value of projects awaiting bidding results exceeds 10 billion baht. If secured as targeted, this will push the backlog from 14 billion baht at the end of the first quarter of 2026 to the target of 20 billion baht by year-end. The company is also advancing its cyber security business through a SOC center in partnership with IBM, responding to surging demand after cyber attacks on major organizations. Currently, 65 to 70 percent of revenue comes from recurring income, and SAV is supported by Vietnamese tourism and Cambodia's visa-free policy.