Singapore Airport Terminal Servs - Grim Outlook

CIMB
In line. 3Q09 core net profit of S$38.4m (-23.8% yoy) was in line with our expectations, at 28% of our FY09 core net profit forecast and consensus. 9M09 core net profit of S$115.3m forms 83% of our FY09 forecast, and 84% of consensus. 3Q09 reported net profit of S$37.6m included a S$0.8m loss on the disposal of a bond, which was guided earlier.

Maintain Underperform and target price of S$1.25. Given a rapidly deteriorating aviation industry with airlines continuing to cut capacity, we do not see near-term catalysts for the stock. Exposure to a weakening UK economy through SFI also poses downside risks. Our sum-of-the-parts target price remains S$1.25.