China Aviation Oil - DBS Research 2022-03-03: 2H21 Missed Expectations; Downgrade To HOLD

China Aviation Oil - 2H21 Missed Expectations; Downgrade To HOLD

  • China Aviation Oil (SGX:G92)'s 2H21 net profit of US$16.1m (-50.8% h-o-h, -33.9% y-o-y) was below our expectations. Final dividend of S$0.019 missed our estimate.
  • Net cash position strengthened to US$401m as of Dec 21, up from US$269m in Dec 20, but we do not see a clear path to enhancing shareholder returns.
  • Based on China Aviation Oil’s risk assessment, sanctions on Russia are unlikely to affect its business, as they do not have trade exposure with Russian-based companies.
  • We are slashing our FY22F net profit estimate for China Aviation Oil by 41% to account for the following factors:
    1. Protracted backwardation in crude oil product markets will weigh on trading profits.
    2. Omicron will be a drag on domestic and international flight activity in China.
  • Downgrade China Aviation Oil to HOLD with lower target price of S$0.85 to reflect negative earnings revisions and less optimistic outlook

Above is the excerpt from report by DBS Group Research.
Clients of DBS may access the full report in PDF @

Jason SUM CFA DBS Group Research | Paul YONG CFA DBS Research | 2022-03-03
SGX Stock Analyst Report HOLD DOWNGRADE BUY 0.85 DOWN 1.200

Previous report by DBS Research:
2021-08-02 China Aviation Oil - Recovery Delayed By Slow Reopening Of Borders

Relevant links:
China Aviation Oil Analyst Report,
China Aviation Oil Target Price,

China Aviation Oil Share Price History,
China Aviation Oil Announcements,
China Aviation Oil Dividends/ Corp Actions,
China Aviation Oil News Articles


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