SATS’s recovery, which is largely dependent on the easing of air travel restrictions, will only be “meaningful” if green lanes allow discretionary travel, according to CGS-CIMB Research.
This is especially the case if discretionary travel is allowed from China and Indonesia, the brokerage says.
About 19% of the total visitors to Singapore in 2019 are from China, notes CGS-CIMB, citing 2019 data from the Singapore Tourism Board. Another 16% are from Indonesia.
The latest travel agreements with South Korea, New Zealand and Brunei only account for about 4% of total international visitors into Singapore.
“[Hence], we think the pace of recovery could still be slow with only essential travel green lanes being established,” CGS-CIMB head of research Lim Siew Khee writes in a note dated Sept 4.
CGS-CIMB has maintained its “hold” rating for the stock with an unchanged target price of $3.00.
As at 12.21 pm, SATS was down 4 cents or 1.33% at $2.97 with 1.2 million shares changed hands.