SINGAPORE (Nov 2): CGS-CIMB Securities is maintaining its “add” call on China Aviation Oil (CAO), lowering its target price on the stock to $1.83 from $2.03 to account for a wider discount of 30% of peer average compared to 25%.

The new target price is now based on 12 times FY19F earnings as opposed to 12.5 times previously, and comes after the release of CAO’s 3Q18 results which reflected an 8% y-o-y fall in earnings to $26 million due to reduced contributions from associates.

In a Thursday report, analyst Cezzane See says she continues to like CAO as a longer-term proxy to China’s growing outbound travel, as well as its healthy balance sheet.

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