SATS

SATS: UOBK maintains at Hold, but lowers TP from $3.40 to $3.13. Tips potential entry price at $2.90. Notes cost pressures remain the key challenge, in view of high staff costs (46% of total costs) arising from govt levies and a tight labor market. Yet the ability to pass on the cost increases could be limited, as pricing is negotiated with airlines annually. Meanwhile, a slowdown in Changi Airport traffic leads UOBK to lower its pax and cargo traffic assumptions.