SATS - UOB Kay Hian 2023-03-13: More Attractive Risk-reward Profile After Share Price Decline, Time To BUY

• At the recent ASEAN Gems Conference held on 7-8 Mar 23, SATS (SGX:S58)’s management shared the company’s outlook and clarified investors’ queries about the WFS deal. With the recent share price decline, SATS’s risk-reward profile is more attractive and now is a good entry point, in our view.
• - Read this at SGinvestors.io -

Management sharing about SATS and WFS at our Taipei Conference.

• We recently hosted SATS at our ASEAN Gem Conference on 7-8 Mar 23. A total of 10 institutional investors attended meetings with SATS.
• - Read this at SGinvestors.io -

Overhang on SATS valuation from rights issuance.

• To recap, SATS is in the process of raising about S$800m in new equity via a rights issuance to partially finance the acquisition of 100% of WFS’ equity priced at about S$1.8b (total enterprise value would be about S$3.2b as SATS would assume the existing debts of about S$1.4b on WFS’ balance sheet. The rights share issuance price has been fixed at S$2.20.
• See SATS's corporate actions. SATS shares have gone ex-rights on 1 Mar 23 and the rights are currently trading on SGX (code: SATS R1) between 7 Mar 23 and 15 Mar 23.
• We note that the activities of some investors selling off rights during this period have depressed SATS's share price (so that there would be no arbitrage opportunity), and likely this pressure would be eased after the rights trading ends on 15 Mar 23.

More attractive risk-reward profile to invest now.

• Read more at SGinvestors.io.

Roy Chen CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2023-03-13 SGinvestors.io

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