Friday, July 12, 2024

China Aviation Oil (G92)

China Aviation Oil (SGX: G92) supply/trades jet fuel and owns 33% stake in Shanghai Pudong International Airport Aviation Fuel Supply Company (SPIA). 

To me, it is a play on China recovering outbound travel (i.e. more outbound flights = more jet fuel supplied + higher profit for SPIA ). Based on aastock article , current chinese international passenger traffic is only 88.1% of 2019's. Hence, the recovery in outbound travel has some way to go.

Currently, China Aviation Oil (CAO) trades at $0.88, which is around LTM 9.5x PER. Net cash per share is around $0.58. 

It's 2023 profit was $59mil. In 2016-19, it's profit ranged from $85mil to $99mil. So if CAO's profit could recover to 2016-19 level, the share price is likely increase accordingly. 

(Note: I am vested in CAO.)


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Notes to myself: Chinese low bond yields and share prices.

 Source:  https://x.com/JeffWeniger/status/1823125112326926751

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