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SATS Ltd - Phillip Securities 2016-04-21: 4Q Operating Data within expectations

SATS Ltd - Phillip Securities 2016-04-21: 4Q Operating Data within expectations SATS LTD S58.SI 

SATS Ltd - 4Q Operating Data within expectations 

  • 4QFY03/16 Operating Data came in within our expectations. 
  • Near-term positive data at Changi Airport is due to biennial seasonality. 
  • Long-term still positive for Singapore Aviation. 

What is the news? 

  • SATS Ltd (SATS) issued its 4Q and FY03/16 aviation operating data for Changi Airport. 

What do we think of this? 


4QFY03/16 operating statistics were in line with our expectations 

  • As such, we do not make any changes to our FY03/16 forecasts prior to the announcement of the 4Q and FY03/16 financial results. 
  • We are still expecting to see strong Operating Data continue into 1QFY03/17 and partially into 2QFY03/17. This strong growth for SATS relative to Changi Airport is primarily driven by the resumption of service to Jetstar Asia and other Jetstar branded airlines since July 2015 (2QFY03/16), after the account was lost in October 2014 (3QFY03/15). 

Maintained at "Accumulate" with higher target price of S$4.17 

  • While 2MCY2016 Commercial Aircraft Movements and Passenger Movements at Changi Airport grew 6.2% and 10.8% yoy respectively, we hasten to point out that this is due to the odd/even year seasonality effect; there was the biennial Singapore Airshow held from 16 to 21 February. 
  • Future longer-term catalysts will come from the completion of major projects such as Terminal 4 (2017/18), Project Jewel (2018), Terminal 5 and Runway 3 (both 2020s). 
  • We maintain our "Accumulate" call on SATS, with a new higher target price of S$4.17 (previously S$4.05) after revising our Operating Data forecasts for FY12/18, FY12/19 and FY12/20.



Richard Leow CFTe Phillip Securities | http://www.poems.com.sg/ 2016-04-21
Phillip Securities SGX Stock Analyst Report ACCUMULATE Maintain ACCUMULATE 4.17 Up 4.05


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