SATS (S58) AI Stock Analysis

• Market Cap: S$4.52B
• Dividend Yield: 1.97%
• Average Volume (3M): 3.76M
• Price to Earnings (P/E): 18.6
• Beta (1Y): 1.07
• Revenue Growth: 60.52%
• EPS Growth: N/A
• Country: SG
• Employees: 52,000
• Sector: Industrials
• Sector Strength: 84
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.07
• Shares Outstanding: 1,495,069,000
• 10 Day Avg. Volume: 2,675,671
• 30 Day Avg. Volume: 3,755,473
• PEG Ratio: 0.55
• Price to Book (P/B): 1.43
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -83.49
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: S$3.46
• Price Target Upside: 15.31% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5

• Rating: 63 Neutral
• Price Target: ―

SATS demonstrates strong financial performance with growth in income and cash flow, and no debt, indicating stability. However, the stock is underperforming technically, with bearish momentum. Valuation is fair, but the low dividend yield may not attract dividend-seeking investors.

Positive Factors

Market Share

SATS's continued market share gains offer resiliency to earnings downside amid global trade uncertainties.

Revenue and Profit Growth

Management highlighted SATS’s operating leverage, where revenue growth helped to almost double its EBIT and triple its core net profit.

Negative Factors

Margin Compression

Downside risks include margin compression from weaker operating leverage due to softening cargo volumes and aviation travel industry slowdown due to global economic downturn.

Tax Rule Changes

The change in the US de minimis tax rule for air cargo is a negative development for SATS.

Trade Disruptions

Trade disruptions are expected to weigh on FY26F earnings, impacting SATS' air cargo division due to trade tensions and policy changes in the US.

SATS Business Overview & Revenue Model

Company Description

SATS Ltd., an investment holding company, provides gateway services and food solutions in Singapore, Japan, and internationally. The company operates through three segments: Food Solutions, Gateway Services, and Others. The Food Solutions segment offers inflight and institutional catering; food processing, distribution services, and airline laundry services. The Gateway Services segment provides airport services, which include airfreight handling services, passenger services, aviation security services, baggage handling services, and apron services, as well as cruise terminal services; and manages and operates marine bay cruise center. The Other Services segment provides rental and other services. In addition, the company offers air cargo, travel retail, security, passenger and private jet services; linen and laundry; food services-solution and distribution; commercial, institutional and aviation catering. The company serves airline, hospitality, healthcare, food, education, and government agencies; and airfreight and logistics industries. SATS Ltd. was formerly known as Singapore Airport Terminal Services Limited and changed its name to SATS Ltd. In July 2010. The company was incorporated in 1972 and is headquartered in Singapore.

How the Company Makes Money

SATS Ltd generates revenue primarily through its core operations in gateway services and food solutions. The gateway services segment includes ground and cargo handling services at airports, which involves managing passenger and baggage handling, aircraft interior cleaning, and cargo logistics. The food solutions segment provides in-flight catering services, producing and supplying meals to airlines. Key revenue streams include service contracts with airlines and airports, as well as partnerships with hospitality providers. Significant factors contributing to SATS's earnings include long-term contracts with major airlines, strategic partnerships with airport authorities, and its ability to leverage economies of scale in its operations.

SATS Financial Statement Overview

Summary

SATS shows strong financial health with robust income growth, efficient operations, and a strong cash flow position. The absence of debt is a positive sign, though there's room for improvement in equity financing.

Income Statement

SATS has demonstrated strong recovery and growth in its income statement metrics. The TTM gross profit margin is 71.85%, and the net profit margin is 3.88%, indicating healthy profitability. The revenue growth rate from the previous annual period to TTM is impressive at 36.64%. Moreover, the EBIT margin and EBITDA margin are 6.11% and 11.15% respectively, showing strong operational efficiency improvements.

Balance Sheet

The balance sheet shows a robust equity position with no total debt in the TTM period, resulting in a debt-to-equity ratio of 0. The return on equity (ROE) is 10.83%, which reflects good returns on shareholders' equity. The equity ratio is 29.48%, suggesting moderate leverage but room for improvement in asset financing through equity.

Cash Flow

SATS's cash flow statement indicates a strong cash position. The free cash flow growth rate is a staggering 132.02% from the previous annual period to TTM, reflecting improved cash generation. The operating cash flow to net income ratio is 3.64, and the free cash flow to net income ratio is 2.77, both suggesting efficient cash conversion from profits.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
7.04B	5.15B	1.76B	1.18B	970.00M	1.94B
	Gross Profit
5.06B	1.73B	354.37M	195.40M	187.50M	598.00M
	EBIT
693.60M	244.20M	-48.03M	-42.63M	-10.11M	226.22M
	EBITDA
784.80M	800.80M	105.22M	92.48M	41.69M	298.78M
	Net Income Common Stockholders
273.30M	56.40M	-26.51M	20.37M	-78.93M	168.36M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
0.00	659.00M	374.46M	786.04M	879.85M	549.21M
	Total Assets
8.56B	8.48B	4.67B	3.29B	3.09B	3.01B
	Total Debt
0.00	4.10B	1.48B	837.84M	873.43M	624.44M
	Net Debt
0.00	3.44B	1.10B	51.80M	-6.42M	75.24M
	Total Liabilities
5.85B	5.92B	2.16B	1.46B	1.39B	1.20B
	Stockholders Equity
2.52B	2.38B	2.33B	1.60B	1.55B	1.62B
Cash Flow		Free Cash Flow
757.70M	326.50M	-39.85M	-15.67M	56.22M	168.30M
	Operating Cash Flow
993.80M	512.10M	79.55M	62.32M	117.75M	243.95M
	Investing Cash Flow
-35.10M	68.00M	-1.83B	31.11M	-28.38M	-117.31M
	Financing Cash Flow
-637.60M	-292.00M	1.34B	-189.30M	239.52M	66.52M

SATS Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 3.00
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:S58, the sentiment is Negative. The current price of 3 is below the 20-day moving average (MA) of 3.08, above the 50-day MA of 2.92, and below the 200-day MA of 3.38, indicating a neutral trend. The MACD of 0.02 indicates Positive momentum. The RSI at 44.59 is Neutral, neither overbought nor oversold. The STOCH value of 22.22 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SG:S58.

SATS Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
S68	79 Outperform	$14.83B	22.58	35.32%	2.60%	8.76%	15.45%
C07	73 Outperform	S$9.66B	7.64	11.58%	7.80%	-0.21%	-22.52%
Sector *	66 Neutral	$4.44B	12.08	5.34%	5.82%	4.17%	-11.81%
S58	63 Neutral	S$4.52B	18.58	9.89%	1.97%	60.52%	―
Z59	60 Neutral	$205.44M	16.96	1.49%	―	4.44%	―
M44U	59 Neutral	S$5.84B	31.51	2.74%	1.68%	-0.97%	-40.20%

SATS Corporate Events

SATS Ltd Secures Loan to Refinance Debt and Reduce Interest Costs

SATS Ltd has secured a S$500 million loan facility to refinance its existing debt, aligning with its strategy to reduce leverage without increasing overall debt. The company has also repaid S$300 million in medium-term notes using internal funds, which will decrease its annual interest expenses by S$8.36 million, reflecting a strong financial management approach.

SATS Ltd. Subsidiary Issues US$100 Million in Fixed Rate Notes

SATS Ltd. announced that its subsidiary, World Flight Services, Inc., has issued US$100,000,000 in fixed rate notes due in 2028 as part of its US$3,000,000,000 multicurrency debt issuance programme. This move, guaranteed by SATS Ltd., is aimed at strengthening its financial position and supporting its strategic initiatives. DBS Bank Ltd. and Industrial and Commercial Bank of China Limited, Singapore Branch, are involved in the issuance as lead manager and co-manager, respectively.

New $270 Million Cargo Terminal Opens at JFK Airport

The Port Authority of New York and New Jersey, in collaboration with Realterm and Worldwide Flight Services, has inaugurated a new $270 million cargo terminal at John F. Kennedy International Airport. This facility, the first of its kind at JFK in 30 years, aims to streamline operations by consolidating four cargo zones into one, thereby reducing congestion and enhancing JFK’s status as a key hub for global trade. The terminal is expected to bolster the local economy by supporting over 93,000 jobs and generating $11.4 billion in economic activity annually, while also improving service for industries reliant on high-value cargo such as pharmaceuticals and electronics.

SATS Ltd. Announces Leadership Transition with New CFO Appointment

SATS Ltd. announced a leadership transition with the appointment of Timothy Tang as the new Group Chief Financial Officer (CFO), effective after the upcoming AGM. This move is part of SATS’ ongoing succession planning and leadership renewal efforts to support its growth ambitions. Timothy Tang brings extensive experience in finance and leadership roles from his previous positions, including his role as CFO at DFS Group. The current CFO, Manfred Seah, will transition to a Special Advisor role, continuing to contribute to critical projects within the company.

SATS Ltd. Prices US$100 Million Fixed Rate Notes Due 2028

SATS Ltd. announced the pricing of US$100 million in fixed rate notes due 2028, issued through its subsidiary World Flight Services, Inc. This issuance is part of a larger US$3 billion multicurrency debt issuance program. The notes, which carry a 4.578% interest rate, are aimed at refinancing existing borrowings, potentially impacting the company’s financial flexibility and market positioning. DBS Bank Ltd. is leading the issuance, with the Industrial and Commercial Bank of China Limited, Singapore Branch as co-manager.

WFS Expands Emirates Partnership with Frankfurt Cargo Contract

Worldwide Flight Services (WFS), a SATS company, has secured a five-year cargo handling contract with Emirates SkyCargo at Frankfurt Airport, enhancing its existing partnership with the airline. This strategic agreement highlights WFS’s role in supporting Emirates’ operations, particularly at Frankfurt, a major cargo hub in Europe, and underscores the company’s investment in pharmaceutical handling capabilities and expertise in managing time-sensitive cargo.

SATS-Creuers to Enhance Marina Bay Cruise Centre by 2025

SATS-Creuers Cruise Services Pte Ltd will lead a significant upgrade of the Marina Bay Cruise Centre Singapore (MBCCS) starting in the first quarter of 2025. This S$40 million project aims to enhance passenger experience by expanding facilities to accommodate larger cruise ships and increasing capacity from 6,800 to 11,700 passengers. The Singapore Tourism Board has extended SATS-Creuers’ operator agreement for up to ten years, reflecting confidence in the company’s ability to manage the upgraded terminal. The improvements will include a new check-in area, updated amenities, and a larger Ground Transport Area to improve accessibility and passenger flow.