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UOB KAYHIAN |
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SATS (SATS SP) Looking Beyond Singapore For Long-term Growth; Upgrade To BUY
While short-term headwinds continue to drag cargo earnings, SATS is investing for long-term growth in overseas markets with S$1b capex commitment over the next three years. We expect 2QFY20 associate earnings to improve qoq. A reduction in Sino-US trade tension will also benefit SATS. Management affirms a sustainable dividend payout policy, implying dividend payout is likely to be maintained in FY20. Upgrade to BUY. Target price: S$5.30.
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Golden Agri-Resources (GGR SP) 2H19 Could See A Recovery But Not Good Enough
Key takeaways from the conference were largely in line with guidance given during the 2Q19 results briefing, ie expecting a better 2H19 on higher hoh FFB production in 2H19 (1H19: -3.1% yoy), flat yoy production in 2019 and better ASP. However, our concern is that production in 2H19 may not be able to increase yoy due to an older age profile and the recent dry weather. Maintain SELL. Target price: S$0.16.
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Check out our compilation of Target Prices
