Singapore Aviation Services- US Marketing Feedback; Overweight
On a recent marketing trip to the US, we shared with clients our views
on the Aviation Services sector. They were generally receptive to our
argument for a positive long-term trend. Some expressed concerns over
valuation levels after the strong run-up in prices over the past year
but most believed that the recent market correction has provided better
entry points.
Overall, they were most excited about the recently announced plans to
double Changi Airport’s capacity by the mid-2020s and believed that it
is a good indicator of demand trends for the sector. Clients also
highlighted the conservative balance sheets of the sector as a key
feature of its defensiveness.
We remain Overweight on the aviation services sector and believe that
SIAEC, SATS and STE will be winners of the positive long-term trend. The
sector provides 19-34% upside to our valuation targets and offers
dividend yield of 4.5-5.2% in the year ahead.
Click here for full report derrickheng@maybank-ke.com.sg
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