We initiate coverage on SATS (SGX:S58) with a BUY rating and a DCF-derived SATS's target price of S$4.52 (22% capital upside + 1.6% dividend yield).
- Read this at SGinvestors.io -
Gateway services segment continues to shine
While US tariffs weigh on the performance of the US Gateway Services segment, we believe key growth drivers are intact. Leveraging its extensive global network, SATS is positioned to capture cargo volume growth from outside China to the US, where e-commerce volumes have been disrupted by abolition of the de minimis exemption.
- Read this at SGinvestors.io -
Resilient amid Middle East tension
Escalating US–Israel strikes on Iran have heightened geopolitical risk, with continued flight cancellations and diversions by airlines such as Emirates and Qatar. Given SATS’ low single-digit revenue exposure to the region, we believe near-term volatility should remain manageable.
SATS appears relatively more resilient than peers, supported by its diversified global network. Its strong presence in Saudi Arabia and Oman could position the group to capture incremental volumes from traffic diversion over the medium term.
In addition, Singapore accounts for ~35% of revenue, and the market could benefit from airlines re-routing traffic through SEA.
Attractive valuation that lags peers
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
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