Price – $5.29
Target – $4.90

SATS’ 4Q17 PATMI of $66.6m was in line with our forecasts. However, excluding a one-off $15m negative goodwill charge, the results were lower than our expectations primarily due to softer Food Solutions revenue and higher staff cost. Nevertheless, investments in technology and productivity over the past 18 months could yield results to improve staff related costs. Operating metrics were good, passengers increased by 3.5% y-o-y, flights handled by 4.1%, cargo processed by 7.3% and ships handled by 31.6%. Gross meals declined slightly by 0.4%, we presume in part due to a growing proportion of low cost carrier flights in the mix. Despite a relatively unchanged FY18/FY19 revenue outlook, we raised our profit forecast after reconsidering cost structure assumptions. Meanwhile, key developments in new investments including turnaround to profitability for Brahim’s inflight catering as well as the commencement of commercial operations for SATS Yihai Kerry were encouraging. Upgrade to HOLD. Maybank Kim Eng (22 May)

Singapore Airlines
Price – $10.76
Target – $10.00

Singapore Airlines (SIA) delivered a disappointing result in 4Q17, with both SIA mainline and SilkAir reporting mid single-digit y-o-y yield decline arising from poor business travel demand and competition with the Gulf and Chinese carriers. The group reported a net loss of $138m primarily due to the $132m provision by SIA Cargo for competition-related fines. Likewise, Budget Aviation Holdings (comprising Scoot and Tigerair) EBIT was halved to $22m largely due to continuing high single-digit pressure on yields and RASK due to load factors not keeping up with more than 20% y-o-y capacity expansion. Saudi Arabia and Russia recently agreed to extend oil production cuts till 1Q18, we think that oil prices rise may spell trouble for SIA if it is unable to pass the higher costs to passengers, but fuel hedging will offer some protection. Downgrade to REDUCE. CIMB Securities (22 May)

Price – $3.76
Target – $3.90

Despite Singtel recording the highest number of postpaid subscribers in the industry at 42,000 in 1Q17, postpaid APRU dipped 4.6% attributable to pressures on roaming and usage revenue, as well as higher take-up of SIM-only plans. Optus continued to see strong subscriber growth on the back of improvement in 4G network coverage. Together with strong content bundling, it was put in a slightly advantageous position against the competition from TPG Telecom. We lowered our FY18/19 earnings forecasts to factor in higher acquisition and retention activities at Optus with the entry of TPG and higher capital expenditure. Nonetheless, downside risk is still limited by SingTel’s attractive and sustainable dividend yield of 5%. Maintain NEUTRAL. RHB Research (19 May)

CNMC Goldmine Holdings
Price – $0.30
Target – $0.31

CNMC Goldmine Holdings’ (CNMC) 1Q17 earnings were below expectations as gold production and sales were weighed down by lower ore grades. The group would have recorded a second consecutive quarter of losses if not for the US$0.3m of unrealised forex gains. Although CNMC has embarked on several initiatives to boost longer-term profitability – including expansion of its mining asset portfolio through recent acquisition as well as setting up of a new carbon-in-leach plant to raise total processing capacity – near-term earnings performance could further worsen owing to persistently lower ore grades and a growing operating cost. Moreover, gold miners are also generally susceptible to volatility in gold prices and output may be hampered by unfavourable weather conditions. Downgrade to HOLD. DBS Vickers (18 May)