Making a Beeline For Thailand
SATS has made a small but likely strategic investment into a food manufacturer. While Food City has been operating in the red for the past three years, SATS’ announcement hints at a ramp-up in production as well as expansion into aviation food services, which could potentially reverse losses. We believe that SATS, with its business links to AirAsia, could garner a share of the airline catering market which is presently dominated by Thai Airways and Bangkok Air Catering, and also expand its product offering in the Thai retail scene. Maintain HOLD. Target; S$4.09.