SATS LTD
S58.SI
SATS Ltd - JV agreement with Oman Air
- SATS Ltd (SATS SP) signed a JV agreement with Oman Air for cargo handling at Muscat International Airport.
- Under to the agreement, Oman Air will transfer its cargo handling business to its wholly-owned subsidiary Oman Air Cargo LLC. SATS Ltd will then acquire 33% stake in the cargo subsidiary SGD22.5m. The deal is expected to be completed in 2Q16.
- While we see long term earnings growth potential form the JV, the deal is not expected to contribute materially for SATS’s near term earnings.
- We maintain NEUTRAL and DCF-based SGD3.70 TP (6% downside) as a net cash balance sheet, stable dividend yield and continuing earnings growth (mostly from cost reductions) in a weakening economic environment would continue to support SATS’ current expensive valuation.
Shekhar Jaiswal
RHB Invest
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http://www.rhbinvest.com.sg/
2016-04-01
RHB Invest
SGX Stock
Analyst Report
3.70
Same
3.70
