Edison Investment Research - China Aviation Oil (Singapore) (S Chip) (G92) China Aviation Oil (Singapore) - Traffic growth supporting demand

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Edison Investment Research

Andy Chambers

China Aviation Oil (Singapore) - Traffic growth supporting demand

FY17 saw record core trading volumes, driven by continued strong demand in jet fuel markets and diversification into other oil products. While margin optimisation execution was more difficult in H217 as markets moved into backwardation, gross margins remained positive and partially recovered from the Q3 low by the year end. Combined with the improved associatesâ€™ contribution driven by strong air transport growth in China, prospects for renewed progress in FY18 are encouraging. The healthy balance sheet also positions the group to pursue development of its supply chain infrastructure globally, especially growth opportunities aligned with Chinaâ€™s One Belt, One Road trade route to Europe initiative. Our fair value currently stands at S$1.82.

29/03/2018 7 EN

Underlying

China Aviation Oil (Singapore) (S Chip)

China Aviation Oil Singapore is a holding company. Co. is engaged in trading in aviation oil and petroleum products, which include jet fuel supply and trading, trading of other oil products and investments in oil related assets. Co.'s segments include: Middle distillates, which is engaged in jet fuel and gas oil supply and trading; Other oil products, which is engaged in fuel oil and petrochemicals products supply and trading; and Others, which is engaged in the investments in oil-related assets. Co. supply jet fuel to the key international airports in China, including Beijing Capital International Airport, Shanghai Pudong International Airport and Guangzhou Baiyun International Airport.

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SG1T06929205 Singapore Exchange Singapore

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Edison Investment Research

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisors and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting.

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Analysts

Andy Chambers

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China Aviation Oil (Singapore) - Traffic growth supporting demand

For CHINA AVIATION OIL, the environment deterioration entails a downgrade to Neutral

China Aviation Oil (Singapore) - Constraints on growth persist

AGBA - A transformational deal

Biodexa Pharmaceuticals - In a period of transition

Norcros - Sale of Johnson Tiles UK agreed

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