SATS Ltd – 3QFY11 Results (Derrick Heng)

Recommendation: Buy

Previous close: S$2.80

Fair value: S$3.30

• Revenue increased by 1.5% to S$440.9mn, PATMI decreased 4.1% to S$51.2mn.
• PATMI in line with our expectations, but could have increased 2% after removing effects of one off M& A expense.
• Food Price inflation remains a concern and would likely result in pressure on profit margins in the near term.
• Maintain Buy recommendation with revised target price of S$3.30.


 

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" Australia cyclone upgraded to top threat level

A terrifying cyclone roaring towards Australia has strengthened to the most dangerous threat level, as forecasters warned it was shaping up as the deadliest storm in generations.

Severe Tropical Cyclone Yasi was upgraded to a category five storm from category four as it menaced the populous east coast, where it was expected to hit around 10:00 pm (1200 GMT) on Wednesday, the Bureau of Meteorology said.

" This impact is likely to be more life-threatening than any experienced during recent generations," it said in an ominous warning that raised the expected strength of the looming storm.

Yasi, packing a storm front 650 kilometres (400 miles) long and an eye measuring about 35 kilometres across, was on course to slam into the populous area between the tourist hub of Cairns and Cardwell to the south.

It was expected to generate highly destructive winds of more than 280 kilometres (175 miles) per hour, 700 millimetres (27.5 inches) of rain and a storm surge that could flood towns and tourist resorts.

" The next 24 hours is going to be, frankly, a very terrifying 24 hours for the people in the danger area," Queensland Premier Anna Bligh said, adding it was " the most severe, the most catastrophic storm to ever hit our coast."

The monster cyclone was over the Coral Sea about 650 kilometres offshore early Wednesday as thousands of locals and tourists fled the coast of northern Queensland state while they still could.

Seaside residents were urged to desert their homes ahead of an " extremely dangerous" storm surge of between 2.3 and four metres (yards) that was likely to cause extensive flooding..........................."

Will  Au locals and tourists fled to Singapore for holiday or head to Genting SP????????????? 

 

 

But why CIMB has posted twice; one at Dec 2010 and now 29 Jan 2011 again for being their Top 10 sell list for 2011? Understand other brokering firm (a few of them )are postive about SATS and their target prices range from $3.31 to $3.80, where CIMB target only $2.42, so much different.

There is a fear for 3rd ground handler licsense to be issue which will be threating SATS for their shares in our airports and airline business when their contract going to due soon. Is this posing diluted earnings or future business for SATS or otherwise? BTW SATS shares price going down like this for the past week just before 01feb2011 its company result announcement reflect/indicate it might have not so good figures to inpress any funds, or funds might have earlier info where they might had dump before their annocuncement!! (This is only my personal view/concerns)