SATS Services

SATS Services: CIMB upgrades to O/p with $3.32 TP from $2.82. House turn positive on SATS, prompted by a breakthrough in Changi Airport’s volumes intertwined with a recovery in profit margins as food inflation peters out. Benefitting from booming air travel in SG, SATS offers stable earnings growth and yields of over 4%. House note that breakthrough in the number of flights handled by Changi Airport prompts house to revisit SATS, the airport’s dominant ground handler. In Nov, Changi Airport handled an average of 920 flights per day, crossing the 900 mark for the first time ever. House previously wary of a margin contraction and cautious on volume growth, as flights handled appeared to have levelled out at around 880 per day.