SATS: Deutsche reinstates Buy with TP $3.80 citing co’s strong position in both aviation and food solutions sectors. House has robust regional aviation outlook (8% air traffic growth) and co is well positioned to take adv of growth coupled with growing food solution biz. Co’s size and ability to offer comprehensive services to support its mkt position against competitors…
TFK acquisition is expected to be value accretive and co has opportunities for further value-accretive acquisition given net cash of S$160m. Risks include falling air traffic, inability to integrate TFK and unfavourable regulations. SATS was valued at 2011e P/E of 12.8x vs aviation peer avg of 19.4x.
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