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:
- Protracted backwardation in crude oil product markets will weigh on trading profits.
- 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 @ https://www.dbs.com/insightsdirect/.
Jason SUM CFA DBS Group Research | Paul YONG CFA DBS Research | https://www.dbs.com/insightsdirect/ 2022-03-03 2022-03-03
Previous report by DBS Research:
2021-08-02 China Aviation Oil - Recovery Delayed By Slow Reopening Of Borders
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