UOB upgrades SATS to hold

Stock Name: SATS
Company Name: SATS LTD.

Research House: UOB KayHian

Price Call: HOLD

Target Price: 2.43

UOB Kay Hian raised its rating on airline services company SATS (SATS.SI) to hold from sell and increased its target price to $2.43 from $2.34, citing an attractive dividend yield.

Shares of SATS ticked up 0.4% to $2.54, and have risen about 18% so far this year.

UOB expects SATS to pay out a special and final dividend of 17 Singapore cents, in the absence of any plans for major mergers and acquisitions, implying a dividend yield of about 10%.

Previous concerns over a slowdown in passenger and cargo traffic have also abated, due to a boost in low-cost carrier traffic, which will lead to incremental earnings and cash flow for SATS, UOB said.