SATS: Deutsche maintains Buy with $3.80 TP. Note that house met mgt and got an update on the business and Jap exposure. Mgt commented that flight suspensions are starting to emerge, yet, JAL which accounts for TFK (SATS newly acquired Jap inflight caterer) is operating flights as per normal. Given unpredictable situation, mgt did not provide any specific assessment of potential impact on TFK, but gave guidance for TFK to be earnings neutral to SATS over FY11/FY12….
House note that grp’s share price has fallen 9% over past 3 mths vs STI 3% and is trading at 13.6x Forward P/E, a discount to its 3yr peak P/E of 17.8x. Add that while there may be near-term challenges for its Jap operatons, grp’s long-term growth story still remains in tact. Based on house estimates, TFK only accts for 20c/share or 6% of SATS SOTP.
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