China Aviation Oil (Singapore)

SP: G92

SGD1126m market cap

SGD1.3 last close

China Aviation Oil (Singapore) Corporation (CAO) is the largest physical jet fuel supplier and trader in Asia. It holds the sole import licence for bonded jet fuel into China, and has nascent businesses in the US and Europe. Of its five associates, the most important is SPIA, which supplies all jet fuel to Shanghai Pudong Airport.

Investment summary

CAO operates as a physical jet fuel supplier as well as trader, while a healthy dividend income from the fuel supply JV at Shanghai’s rapidly expanding Pudong Airport provides the bulk of earnings. FY18 revenues grew 27% to a record US$20.6bn reflecting higher oil prices and despite lower trading volumes. The associates profit grew modestly as increased Shanghai Pudong refuelling volumes offset declines in other associates. Strong air transport growth in China continues to support modest growth in FY19, as reflected in a flat Q119 performance. Our forecasts are under review. The healthy balance sheet positions the group to pursue development of its global supply chain infrastructure.

Y/E Dec
Revenue (US$m)
PBT (US$m)
EPS (fd) (c)
P/E (x)
P/CF (x)
2017A 16268.0 23.7 87.6 9.9 9.7 36.6
2018A 20612.0 30.9 96.7 10.9 8.8 3.8
2019E 20750.0 31.2 105.0 11.8 8.1 10.5
2020E N/A N/A N/A N/A N/A N/A
Industry outlook

As the sole licensed importer and supplier of jet fuel to China’s civil aviation industry, CAO is a direct play on the rapidly rising demand for air travel in China, with growth augmented by both international and product expansion. Air transport is widely acknowledged to be an industry in a period of structural growth. International travel from China is increasing four times faster than the global average, so CAO is exposed to a sweet spot in the market.

Last updated on 25/07/2019
Share price graph
Balance sheet
Forecast net cash (US$m) 216.9
Forecast gearing ratio (%) N/A
Price performance
Actual (2.3) (9.1) (13.3)
Relative* (4.5) (9.9) (14.7)
52-week high/low S$1.6/S$1.0
*% relative to local index
Key management
Meng Fanqiu CEO
Wang Chunyan CFO
Elaine Ange Head of IR
Jean Teo COO
Lilian Low Investor Relations Manager