The chart of SATS
SATSL$3.84, buy on pull back. more that 4% upside in short term.
SATS reported a significant increase in net profit for 2Q FY25, growing by S\$47.5M (> 200% YoY) to S\$69.7M. Revenue for the same period grew 14.1% YoY to S\$1.45B, driven by aviation recovery in Asia and increased global air cargo volume. EBITDA margin also improved from 15.2% to 18.3% YoY
Significant net profit growth of > 200% YoY.
Strong revenue growth driven by aviation recovery and increased cargo volume.
Improved EBITDA margin indicating better cost efficiency.
Strategic partnerships enhancing market position and operational capabilities.
SATS Ltd is maintained at a “BUY” rating with a higher target price of S\$4.30. The valuation is based on 18.4x FY27 PE, 0.5SD below SATS’ historical mean PE of 19.9x before the pandemic. The company’s proactive share buybacks in the market support a limited downside from the current share price. – UOBKH
During its Capital Markets Day, SATS Ltd shared detailed financial targets for FY29F, including breakdowns by its different business segments. The company aims for a revenue target of S\$8bn, which requires an EPS CAGR of 9.2% over FY24-29F. Despite this being ahead of our 3-year EPS CAGR of 7.2%, the company is confident that revenue growth will be driven by both existing businesses and new offerings. SATS projects a capex budget of 5% of revenue per annum during FY24-29F, with a 60%/40% split between maintenance and expansionary capex.
SATS Ltd has set ambitious financial targets for FY29F, supported by detailed strategies for its gateway services and food solutions segments. The company’s recent financial performance and ESG initiatives further bolster confidence in its growth trajectory. While industry peers like MAHB and AOT also present strong metrics, SATS’s comprehensive approach and strategic expansions position it favorably in the market. – CGS
If you are not currently holding SATS stock, it is worth considering an investment due to the company’s robust growth prospects, strategic partnerships, and improved financial metrics.
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