Thursday, November 25, 2010


SATS: Japan Airlines is in final talks to sell its in-flight meal subsidiary TFK Corp to SATS. Selling price may be above ¥10bn (~S$157m). TFK is Japan's top provider of in-flight meals and services over 30 domestic and international airlines. TFK recorded ~¥22bn in sales last fiscal yr…

SATS operations are mainly in Spore and the UK. A successful acquisition would allow SATS to extend its geographical footprint to the Japanese mkt, and make more efficient use of its underleveraged balance sheet…

Stock trades at 15.2x FYMar11E P/E, supported by 4.8% yield. The majority of Street rates as Buy with targets ranging $3.07-3.50, cite SATS as a key beneficiary of rising tourist arrivals to Spore. CIMB the only house to rate as Underperform with $2.35 target.

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