SATS: Cloudy outlook on the horizon
- In 4QFY16, growth in meal production was offset by declining ASPs. UBS expects this trend to continue in FY17.
- Passenger seat capacity data at Changi Airport points to slower meal production growth, and the house expects declining airline passenger yields to put further downward pressure on ASPs.
- UBS thinks it will be difficult for SATS' earnings to surprise on the upside in FY17, as Singapore aviation catering accounts for 40-50% of group net profit.
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