CIMB Research upgraded its rating on airline services
company SATS Ltd to 'outperform' from 'neutral' and
raised its target price to S$3.32 from S$2.82, citing a rise in
air travel in Singapore.
SATS shares were up 0.7 percent at S$2.96 and have gained
2.4 percent since the start of the year, compared with the FTSE
ST Industrials Index's 3 percent rise.
CIMB expects higher air traffic volume through Singapore. In
November, Singapore's Changi Airport handled an average 920
flights per day, a record high. With the thriving air travel in
Singapore, CIMB said SATS can offer stable earnings growth and
yields of over 4 percent.
Meanwhile, CIMB said SATS' profit margins were expected to
recover, helped by easing food inflation. The brokerage expects
SATS's core net profit margin to improve 0.4 percentage points
to 9.9 percent in 2013.
0947 (0147 GMT)