China Aviation Oil (G92.SG) down 2.4% at $1.63 after it posts 3Q net profit of US$13.8 million ($17.8 million), down 26.3% on year, off 23.8% on quarter, partly on lower gross profit (down 10.4% on year at US$7.9 million), due to lower gains from trading activities, higher freight costs. 

While fall today on strong volume of 1.5 million shares, stock likely continuing 2-session correction after 13.2% rise since October 28, as sequential weakness hardly surprising after stellar 2Q, end of China Expo in quarter; group CEO says “a slowdown in growth momentum for the second half was largely expected.” 

 

Further downside may be limited, as outlook for aviation growth in Asia remains robust, with CAO expected to benefit from increased spending power, air travel in China, region; also, CEO says recently signed 4-year collaboration with BP likely to have positive impact on FY11. 10-day moving average at $1.60 likely to support.