SATS - CGS-CIMB Research 2024-01-15: Hopeful Of Improving Profitability Profile

• We think that SATS should see q-o-q revenue growth of ~7% in 3QFY24F (Oct to Dec 2023) to ~S$1.37bn, driven by a recovery in cargo demand and higher International visitor arrivals. As such, we expect SATS to report a ~S$28m in PATMI (+70% q-o-q) in 3QFY24F.

Recovery of global cargo volumes accelerated in Nov 23

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• We believe a similar growth rate is likely for Dec 23 given the gifting season, which should support revenue growth for SATS’s cargo business that made up ~49% of SATS’s revenue as of 1H24.

Global passenger demand almost back to pre-COVID levels

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• As such, SATS’s ground handling and aviation food sub-segments should see revenue growth in 3Q23F on stronger seasonal travel. The latter is also likely to translate to higher q-o-q contributions from its associates and joint ventures in China, Japan, and Malaysia.

Operating leverage driven by expected stable cost profile

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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/.

Previous report by CGS-CIMB:
2023-11-13 SATS - Focus On Cashflow After P&L Turnaround .

Price targets by 4 other brokers at SATS Target Prices.

Listing of research reports at SATS Analyst Reports.

Relevant links:
SATS Share Price History,
SATS Announcements,
SATS Dividend Payout Dates & Corporate Actions,
SATS News