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RHB looks past China Aviation Oil's profit warning, optimistic on gradual traffic recovery

Jovi Ho
Jovi Ho2/3/2022 11:52 AM GMT+08  • 3 min read
RHB looks past China Aviation Oil's profit warning, optimistic on gradual traffic recovery
China Aviation Oil has issued a profit warming stating that it expects 2021 profit before tax to decline by 26% y-o-y.
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Optimistic on gradual traffic recovery, RHB Group Research analyst Shekhar Jaiswal is choosing to look past China Aviation Oil’s profit warning for 2021 and China’s strict zero-Covid-19 policy.

“Despite lowering 2021F-2023F earnings by 3%-11%, we believe valuation remains compelling as we remain confident of a gradual profit growth as aviation traffic recovers over the next two years,” writes Jaiswal.

In a Feb 3 note, Jaiswal is maintaining “buy” on China Aviation Oil with a lowered target price of $1.09 from $1.13 previously. The new target price represents a 16% upside and about 2% yield.

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