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China Aviation Oil kept at 'buy' by RHB on diversification strategy, long-term growth prospects

Uma Devi
Uma Devi1/21/2020 03:56 PM GMT+08  • 3 min read
China Aviation Oil kept at 'buy' by RHB on diversification strategy, long-term growth prospects
Given CAO's zero debt balance sheet and significant net cash position (24% of its market cap), analyst Shekhar Jaiswal believes that the group is able to undertake a "sizable earnings-accretive acquisition."
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SINGAPORE (Jan 21): RHB Group Research is reiterating its “buy” call on China Aviation Oil (CAO) with a target price of $1.55, representing a 21% upside for the stock.

In a Tuesday report, RHB analyst Shekhar Jaiswal continues to remain sanguine on the group’s long-term growth prospects, which could well be boosted by the continuing rise in China’s aviation traffic, as well as the group’s diversification into jet fuel supply to non-Chinese markets.

Firstly, Jaiswal highlights how a 17% hike in China’s international aviation passenger traffic could bode well for CAO, as all international flights flying out of China are required to use imported jet fuel.

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