Author: kktan
STEng – DBSV
A boost to P2F conversion pipeline
A330 P2F programme on track. ST Engineering announced the finalisation of agreements with Airbus and its parent EADS to collaborate on the A330 Passenger-to-Freighter (P2F) conversion project. The initial agreement had been announced during the Singapore Airshow earlier in February. Under the final agreement, ST Engineering will invest about Euro 110.5m (S$186.6m) for a 35% effective stake in EADS EFW, the P2F conversion arm of EADS. EADS will hold the remaining 65% and will also have a call option over STE’s 35% stake during the engineering development phase of the A330P2F programme. The call option will expire when the engineering work is successfully delivered to EADS EFW. The engineering phase is expected to commence by end-2012.
ST Aerospace will be the engineering lead. ST Aerospace, with its engineering design experience, will be the lead during the engineering and development phase, while EADS will be the lead in terms of actual modifications and marketing. Most of the conversion works will be done at EADS EFW’s facility in Dresden, Germany, with the remainder coming to a dedicated ST Aerospace facility. The first converted aircraft is expected to come into service by 2016, with airlines like Qatar Airways already showing an interest in the programme. The larger A330-300P2F will be targeted at cargo integrators, while the A330-200P2F will be optimised for higher-density freight and longer-range performance.
Expands capabilities, potentially boosts associate profits. If this programme is successful, ST Aerospace will be the first independent MRO to have expertise in Airbus A330 conversions, and potentially other members of the Airbus family in future. This adds to STE’s industry-leading range of P2F capabilities, on top of its successful MD-11, B757 and B767 P2F programs running currently. EADS EFW will also serve as ST Aerospace’s European MRO center, which fills the only major gap in ST Aerospace’s global MRO footprint. While the investment is not likely to yield returns in the short term, STE’s strong balance sheet allows it the luxury to wait for associate profits to come in when the project is commercialised. EADS EFW has to date converted more than 170 freighters for 39 global customers. Its other projects include A300-600P2F and A310P2F. No change to our earnings estimates for FY12/13F. Maintain BUY with TP S$3.40.
STEng – DBSV
A boost to P2F conversion pipeline
A330 P2F programme on track. ST Engineering announced the finalisation of agreements with Airbus and its parent EADS to collaborate on the A330 Passenger-to-Freighter (P2F) conversion project. The initial agreement had been announced during the Singapore Airshow earlier in February. Under the final agreement, ST Engineering will invest about Euro 110.5m (S$186.6m) for a 35% effective stake in EADS EFW, the P2F conversion arm of EADS. EADS will hold the remaining 65% and will also have a call option over STE’s 35% stake during the engineering development phase of the A330P2F programme. The call option will expire when the engineering work is successfully delivered to EADS EFW. The engineering phase is expected to commence by end-2012.
ST Aerospace will be the engineering lead. ST Aerospace, with its engineering design experience, will be the lead during the engineering and development phase, while EADS will be the lead in terms of actual modifications and marketing. Most of the conversion works will be done at EADS EFW’s facility in Dresden, Germany, with the remainder coming to a dedicated ST Aerospace facility. The first converted aircraft is expected to come into service by 2016, with airlines like Qatar Airways already showing an interest in the programme. The larger A330-300P2F will be targeted at cargo integrators, while the A330-200P2F will be optimised for higher-density freight and longer-range performance.
Expands capabilities, potentially boosts associate profits. If this programme is successful, ST Aerospace will be the first independent MRO to have expertise in Airbus A330 conversions, and potentially other members of the Airbus family in future. This adds to STE’s industry-leading range of P2F capabilities, on top of its successful MD-11, B757 and B767 P2F programs running currently. EADS EFW will also serve as ST Aerospace’s European MRO center, which fills the only major gap in ST Aerospace’s global MRO footprint. While the investment is not likely to yield returns in the short term, STE’s strong balance sheet allows it the luxury to wait for associate profits to come in when the project is commercialised. EADS EFW has to date converted more than 170 freighters for 39 global customers. Its other projects include A300-600P2F and A310P2F. No change to our earnings estimates for FY12/13F. Maintain BUY with TP S$3.40.
SingTel – BT
SingTel acquires HungryGoWhere for $12m
SingTel on Tuesday said it is acquiring the parent company of HungryGoWhere, GTW Holdings Private Limited (GTW), for $12 million.
Restaurant review portal HungryGoWhere.com is the leading food portal in Singapore, with additional online presence in Hong Kong, Malaysia, Vietnam, Cambodia and Australia.
HungryGoWhere has recently developed and launched the TableDB Reservation Platform, built on tablet solutions, which gives restaurateurs a reservation book that is as mobile and easy to use as traditional pen-and-paper.
Under the agreement, GTW will become a wholly-owned subsidiary of SingTel. Its operations will be merged with inSing.com – also a subsidiary of SingTel – a lifestyle and local search site.
SingTel – BT
SingTel acquires HungryGoWhere for $12m
SingTel on Tuesday said it is acquiring the parent company of HungryGoWhere, GTW Holdings Private Limited (GTW), for $12 million.
Restaurant review portal HungryGoWhere.com is the leading food portal in Singapore, with additional online presence in Hong Kong, Malaysia, Vietnam, Cambodia and Australia.
HungryGoWhere has recently developed and launched the TableDB Reservation Platform, built on tablet solutions, which gives restaurateurs a reservation book that is as mobile and easy to use as traditional pen-and-paper.
Under the agreement, GTW will become a wholly-owned subsidiary of SingTel. Its operations will be merged with inSing.com – also a subsidiary of SingTel – a lifestyle and local search site.
SATS – DMG
Stable aviation business
With the disposal of its UK business in 3QFY12, SATS recorded a marginal decline in 4QFY12 PATMI (1.2% YoY) to S$50.1m. Excluding the UK business, SATS managed to achieve a 10.0% YoY growth in 4QFY12 EBIT, even as revenue rose 7.8% YoY. Its Food Solutions business (particularly the aviation-related segment) would benefit from the improving tourism and air travel in the region, helped by a still-healthy regional economy. This could be somewhat offset by expected weakness in the cargo segment, mainly due to the ongoing economic slowdown in Europe and the US. SATS had announced a special dividend of 15 S¢/share for 4QFY12. Including the interim and final dividends (5 S¢ and 6 S¢ respectively), total dividends for the year would amount to 26 S¢/share. As we roll-forward our earnings estimates, our DCF-based TP is revised to S$2.57. Maintain NEUTRAL.
Expect stability to continue, with some growth. Revenue from SATS’ aviation business (excluding TFK) was rather stable over the past few quarters, registering flat QoQ growth. This was even as the global economy was going through much uncertainty during that period. Demand in the cargo segment is expected to remain weak over the next two quarters. With the growing popularity of LCCs and improving regional tourism, we are estimating flat growth in SATS’ Airport Services division (which includes ground handling services and cargo). Growth in its Food Solutions business, which includes the stable non-aviation related business, is likely to be helped by improvements at TFK.
Maintain NEUTRAL. Given the global economic uncertainty, we are estimating FY13 earnings to grow 8.1% to S$184.7m. The ICT is expected to be operational in the next month, but positive contribution is only likely in FY14. We continue to like SATS for its stability and strong balance sheet (net cash of 28.3 S¢/share). However, at S$2.60, SATS is trading at 15.6x forward P/E, compared to its historical average of 14.5x.