Stock Name: SATS
Company Name: SATS LTD.
OCBC Investment Research in a Sept 1 research report says: "In 1QFY12, excluding one-off accounting gain of $10.1 million arising from its pension obligations, TFK reported pre-tax loss of $7 million. Consensus numbers do not seem to have factored in the impact of loss-making TFK on the group.
"We have lowered our FY2012 earnings forecast by 14.2% to reflect the drag of TFK on the group's earnings. Our new FY2012 net profit of $171.3 million is the second lowest on the street and 13.2% lower than consensus. With the headwinds facing the aviation sector and global economy, the street's implied P/E of 15.3x on FY12 earnings seems a little too optimistic.
"Instead, we assigned a 14.5x P/E, or one standard deviation below its two-year historical average, on our earnings forecast over the next four quarters to arrive at a fair value of $2.36 (versus $3.02 previously), an upside of 3.6%. DOWNGRADE TO HOLD."
Company Name: SATS LTD.
| Research House: OCBC | Price Call: HOLD | Target Price: 2.36 |
OCBC Investment Research in a Sept 1 research report says: "In 1QFY12, excluding one-off accounting gain of $10.1 million arising from its pension obligations, TFK reported pre-tax loss of $7 million. Consensus numbers do not seem to have factored in the impact of loss-making TFK on the group.
"We have lowered our FY2012 earnings forecast by 14.2% to reflect the drag of TFK on the group's earnings. Our new FY2012 net profit of $171.3 million is the second lowest on the street and 13.2% lower than consensus. With the headwinds facing the aviation sector and global economy, the street's implied P/E of 15.3x on FY12 earnings seems a little too optimistic.
"Instead, we assigned a 14.5x P/E, or one standard deviation below its two-year historical average, on our earnings forecast over the next four quarters to arrive at a fair value of $2.36 (versus $3.02 previously), an upside of 3.6%. DOWNGRADE TO HOLD."
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