Company Name: SATS LTD.
Research House: Phillip Securities
SATS (S58.SG) off 0.4% at $2.83, giving back some of yesterday’s 0.7% gain which came amid a weak market on news the company has completed the acquisition of Japan Airlines International’s entire 50.7% stake in in-flight caterer TFK Corp. for $122 million.
Phillip Securities, which has a Buy call and raises its target to $3.48, says the purchase is a proxy to growth at Japan’s Narita and Haneda airports.
The house raises its earnings estimates for FY11, FY12 and FY13 by 0.6%, 4.4% and 4.6% respectively to account for the acquisition; it estimates TFK will contribute 18.4% of group sales, which could breach the $2 billion milestone in FY12E.
CIMB lifts its FY11-FY13 EPS estimates 1.0%-3.0% to account for the new contributions, but maintains its Underperform call due to rich valuations “and risks of competition in ground handling.”
Its raises SATS’ target to $2.42 from $2.35.
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