SATS

SATS: released 4Q12 operating data.
Flights handled and passengers handled were up 9.6% and 10% rptvly.
Meals produced was up 6.3% accordingly on the back of higher pax growth.
In contrast, cargo/ mail processed declined by 2.4% due to soft consumer demand especially for electronics and manufactured gds in mkts like Europe and Americas.

UOBK notes, the improvement in unit services handled suggests an equivalent increase in gateway services revenue. Says, overall, the Singapore based operations is likely to show an operating margin improvement, given the strong headline stats.

However, believes TFK remains a wild card and the market will be looking for signs of improved profitability from this division. TFK reported a minor $1.5m in operating profit on $82m in revenue for 3QFY12. JAL's 2MFY12 traffic showed qoq declines and this suggests lower revenue for TFK. It remains to be seen if the unit achieved cost savings, leading to improved margins.

UOBK maintains its Hold rating with an ex-div TP of $2.43. Estimates that SATS will report a special dividend of 17 cts + final dividend of 8 cts when it releases full year results on 14 May.