S'pore-Event-Driven-pick | China Aviation Oil (CAO SP SP) Px/Tgt SGD1.63/2.26
1. UOBKH has been having CONVICTION CALLS on CAO SP as follows:
a. BUY: Apr 2017 sgd1.63
b. Look to BUY: Jan 2017 <sgd1.30
c. Put-on-BUY-radar: Oct 2016 <sgd1.30
d. Take-Profit: Aug 2016 sgd 1.50
e. Conviction Buy: May 2016 sgd 0.99
2. CAO SP event-catalyst are as follows:
a. Apr 2017: UOBKH upgraded target SGD2.26 is at 2017 PE of 14x (vs peers at 18x)
b. Apr 2017: Excellent 1Q17 results
c. 2Q 2017: Delay in possible utilisation of its USD220m cash for M&A (likely to take a stake in a European airport & do a similiar ops as Shanghai Pudong)
3. UOB Kay Hian Research maintain BUY with target price raised to S$2.26 based on 14.4x 2017F PE, pegged at a 20% discount to peers' average PE of 18x. Catalysts include potential for future growth as the Shanghai airport builds a new terminal (aiming to be amongst the world's top three busiest airports in 2019 and the general China's civil aviation boom.
UOB Kay Hian Research issued a report dated today on the above topic. Please contact us for the full research analyst report.
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