Continue reading this on our app for a better experience

Open in App
Floating Button
Home Capital Broker's Calls

SATS still 'well-positioned' to capture Changi Airport’s mid-term traffic recovery: Citi

Felicia Tan
Felicia Tan • 2 min read
SATS still 'well-positioned' to capture Changi Airport’s mid-term traffic recovery: Citi
The arrival hall at Changi Airport's Terminal 1. Photo: Samuel Isaac Chua/The Edge Singapore
Font Resizer
Share to Whatsapp
Share to Facebook
Share to LinkedIn
Scroll to top
Follow us on Facebook and join our Telegram channel for the latest updates.

Citi Research analyst Kaseedit Choonnawat has kept his “buy” call on SATS as the group is deemed as being “well-positioned” to capture Changi Airport’s mid-term traffic recovery.

He has, however, lowered his core earnings estimates for the FY2023 and FY2024 by 75% and 13% respectively to factor in near-term costs and revenue mismatch pressures.

On the other hand, the analyst has increased his earnings estimates for the FY2025 by 19% based on incremental anecdotal evidence of strong air-traffic volume recovery.

“Our revised earnings are 54% below [the] street for FY2023, 4% below for FY2024 and in-line for FY2025,” he observes.

In his report dated July 9, SATS is still seen as Choonnawat’s aviation sector pick in Asean.

Further to his report, the analyst has increased his target price to $4.70 from $4.60 previously, which reflects his valuation rollover to FY2023.

See also: Test debug host entity

“Beyond near-term capacity re-ramping costs/revenue mismatch and declines in non-aviation food revenue related to Covid facilities in Singapore, of which the market is aware; we see strong air-traffic recovery at Changi Airport (46% of pre-Covid in May, forward schedule points to 80% by November) and structural connecting traffic share gains from other Asean hubs as key share price drivers,” the analyst writes.

SATS will be releasing its results for the 1QFY2022 ended June after market trading hours on July 22.

As at 10am, shares in SATS are trading 1 cent higher or 0.25% up at $4.04.

Highlights

Re test Testing QA Spotlight
1000th issue

Re test Testing QA Spotlight

×
The Edge Singapore
Download The Edge Singapore App
Google playApple store play
Keep updated
Follow our social media
© 2024 The Edge Publishing Pte Ltd. All rights reserved.