SATS - UOB Kay Hian 2024-01-10: Earnings Recovery To Gain Traction In 2024; Red Sea Crisis To Benefit Air Cargo

SATS - Earnings Recovery To Gain Traction In 2024; Red Sea Crisis To Benefit Air Cargo

Published:
SATS (SGX:S58) | SGinvestors.ioSATS (SGX:S58)
  • We expect SATS’ earnings recovery to gain traction in 2024, driven by the continued air traffic recovery and growth in global air cargo demand. The ongoing Red Sea crisis, which has led to more time-sensitive cargo being diverted from ocean freight to air freight, should also benefit SATS given WFS’ strong presence in Europe.
  • - Read this at SGinvestors.io -

Earnings recovery to gain traction in 2024.

  • SATS (SGX:S58) has been a laggard in terms of earnings recovery compared with other Singapore aviation plays. However, we expect its recovery momentum to gain speed in 2024, as:
    • - Read this at SGinvestors.io -
    • its air cargo handling businesses should benefit from a potential reacceleration of air cargo growth, with IATA forecasting a 4.5% y-o-y growth for global air cargo demand in 2024.
  • In addition, with an already more or less stabilised headcount ramp-up, operating leverage should also kick in and help SATS’ earnings recovery.
  • We forecast SATS’ FY25 (Apr 24 – Mar 25) net profit at S$158m, a 283% y-o-y growth from FY24’s low base of S$41m, and project SATS’ earnings to rise further to S$285m (more normalised state of earnings) in FY26.

The Red Sea crisis may provide tailwinds to air cargo demand, benefitting SATS.

  • Read more at SGinvestors.io.




Above is the excerpt from report by UOB Kay Hian Research.
Clients of UOB Kay Hian may be the first to access the full report in PDF @ https://www.utrade.com.sg/.




Roy Chen CFA UOB Kay Hian Research | https://research.uobkayhian.com/ 2024-01-10



Read also UOB's most recent report:
2024-03-04 SATS - 3QFY24 Results In Line; Earnings Recovery On Track.

Price targets by 3 other brokers at SATS Target Prices.

Listing of research reports at SATS Analyst Reports.

Relevant links:
SATS Share Price History,
SATS Announcements,
SATS Dividends & Corporate Actions,
SATS News Articles





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