SINGAPORE (June 12): RHB Group Research is keeping its “buy” recommendation on China Aviation Oil (CAO) with a target price of $1.25.

In a Friday report, analyst Shekhar Jaiswal says, “China Aviation Oil remains a good proxy to recovering Chinese aviation traffic. We foresee upside risks to 2H20 earnings, if current improvements in daily air passenger volume in China are sustained.”

On June 6, the Civil Administration of China reported that daily air passengers exceeded 1 million for the first time since Jan 28, and recovering to about 62% of 2019 levels. Daily air passengers and daily number of flights in the first five days of June 2020 reached 935,200 and 10,570 respectively, recovering to 57% and 66% of 2019 levels.

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