Paul Chew, an analyst from Phillip Securities, maintained the Buy rating on China Aviation Oil (Singapore). The associated price target was raised to S$1.50.
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Paul Chew has given his Buy rating due to a combination of factors that highlight the strong financial performance and growth prospects of China Aviation Oil (Singapore). The company reported a significant increase in its 1H25 PATMI by 18.4% year-over-year, reaching US$50 million, which exceeded expectations and accounted for 60% of the full-year estimates. This growth was primarily driven by higher profits from the jet fuel supply business, supported by increased supply volumes and optimization gains.
Additionally, the company’s associates showed robust performance, with a notable increase in refueling volumes at Shanghai Pudong International Airport, contributing to a rise in profits. The decision to upgrade the stock from ACCUMULATE to BUY is also supported by the surging demand for jet fuel and the rising contributions from associates. Furthermore, CAO’s strong net cash position, representing a significant portion of its market capitalization, adds to its financial stability. However, potential risks include the underutilization of cash and lower trading margins.
Chew covers the Industrials sector, focusing on stocks such as Keppel Corporation Limited, Sembcorp Industries, and ST Engineering. According to TipRanks, Chew has an average return of 21.7% and a 67.80% success rate on recommended stocks.
In another report released on August 18, CGS-CIMB also reiterated a Buy rating on the stock with a S$1.45 price target.