The COVID-19 pandemic has hit airport operators hard, as travel effectively stopped during the second quarter and is still far below anything like normal levels. While Mexico’s Grupo Aeroportuario Del Sureste SAB (ASR) (“ASUR”) has historically been prized for its strong leverage to tourist travel, its diversification, and its strong non-aero revenue (“ancillary” businesses like car rental, parking, retail, currency exchange, et al), those assets may well be liabilities in the short term as tourist traffic may be slower to recover in a COVID-19/post-COVID-19 world.
On top of that, there’s uncertainty now tied to ASUR’s renegotiation of its Master Development Plan in Mexico, essentially the concession under which it operates airports, and how capex spending will develop before that renegotiation is finalized.
I think ASUR will be fine long term from an operational standpoint. While these shares have underperformed the company’s Mexican peers Grupo Aeroportuario del Centro Norte (OMAB) ("OMAB") and Grupo Aeroportuario del Pacífico (PAC) ("GAP"), ASUR’s valuation looks more “okay” than compelling, and I still see more opportunity in OMAB today.
Read more here:
Grupo Aeroportuario Del Sureste Will Recover, But It May Be A Bumpy Ride
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