SATS - ROE To Return To 13-15% By 2025
- We think SATS (SGX:S58)’s 3-year revenue target of S$3bn by FY25F is achievable, assuming a 100% pre-COVID travel recovery and successful M&A strategy.
- SATS has reset its S$1bn investment/capex target over 3 years, a plan that was shared in its previous 2019 capital market day, but stalled by COVID-19.
- Management is also cautiously optimistic that ROE could return to 13-15% by FY25F (FY16-19: ~15.4%) with potential lower margin trend in the near-term.
- Execution and recovery are key. Maintain HOLD rating on SATS and lower target price to S$4.32.
- SATS's share price trades at 37x FY23F P/E, above its pre-COVID-19 ~26x in 2018.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
LIM Siew Khee CGS-CIMB Research | TAY Wee Kuang CGS-CIMB Research | https://www.cgs-cimb.com 2021-11-12 2021-11-12
Read also CGS-CIMB's most recent report:
2023-01-14 SATS - Peek Into Pro-Forma WFS Numbers Ahead.
Previous report by CGS-CIMB:
2022-12-02 SATS - Finalisation Of Funding Structure For WFS Acquisition.