ValuationOur DCF valuation of AIO is $3.95ps.We estimate an...

Valuation

Our DCF valuation of AIO is $3.95ps.

We estimate an average growth in cash flows of 5% pa over the forecast period to 2030 and terminal growth rate of
3% pa. We employ a pre-tax WACC of 11% to discount the cash flows.

However, our target price of $1.70ps is an average of 9-10x FY10e EV/ EBITDA, i.e. $1.24ps-$2.15ps.

The range should be viewed as ‘trough’ and ‘peak’
assessment in the current environment. The target price is cross-checked by ascribing a plausible 11x multiple for Ports and 8x for Rail.