Thursday, May 19, 2011

SATS rated 'buy' by Phillip Securities

Stock Name: SATS
Company Name: SATS LTD.
Research House: Phillip Securities

Phillip Securities Research in a May 18 research report says: "SATS's PATMI for FY2011 was in line with our expectations to record a 5.6% y-y increase to $191.4 million. SATS also consolidated the results of TFK Corp for the first time in 4QFY11 (Revenue: $72.6 million; Operating loss: $1.6 million).

"TFK's losses for the quarter are fairly small, in our opinion, considering the disruptions to air traffic experienced in the month of March. Despite the translational effects of a weaker GBP against SGD, the UK business managed to record a marginal growth in revenue contribution, which we estimated to be an 8% y-o-y growth in local currency terms.

"Our target price of $3.41 implies a FY12E P/E of 19X, which is at the top end of its historical P/E range. After including forecasted dividends of 17.3 cents over the next 12months, we expect total return of 34.8%. MAINTAIN BUY."

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