Latest news with #ChinaAviationOil
Yahoo
4 days ago
- Business
- Yahoo
China Aviation Oil (Singapore) Corporation Ltd's (SGX:G92) Stock Is Rallying But Financials Look Ambiguous: Will The Momentum Continue?
China Aviation Oil (Singapore) (SGX:G92) has had a great run on the share market with its stock up by a significant 51% over the last three months. But the company's key financial indicators appear to be differing across the board and that makes us question whether or not the company's current share price momentum can be maintained. Specifically, we decided to study China Aviation Oil (Singapore)'s ROE in this article. ROE or return on equity is a useful tool to assess how effectively a company can generate returns on the investment it received from its shareholders. Simply put, it is used to assess the profitability of a company in relation to its equity capital. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. How Is ROE Calculated? The formula for ROE is: Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity So, based on the above formula, the ROE for China Aviation Oil (Singapore) is: 7.9% = US$78m ÷ US$990m (Based on the trailing twelve months to December 2024). The 'return' is the profit over the last twelve months. One way to conceptualize this is that for each SGD1 of shareholders' capital it has, the company made SGD0.08 in profit. Check out our latest analysis for China Aviation Oil (Singapore) What Has ROE Got To Do With Earnings Growth? So far, we've learned that ROE is a measure of a company's profitability. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company's earnings growth potential. Generally speaking, other things being equal, firms with a high return on equity and profit retention, have a higher growth rate than firms that don't share these attributes. A Side By Side comparison of China Aviation Oil (Singapore)'s Earnings Growth And 7.9% ROE At first glance, China Aviation Oil (Singapore)'s ROE doesn't look very promising. A quick further study shows that the company's ROE doesn't compare favorably to the industry average of 10.0% either. Therefore, it might not be wrong to say that the five year net income decline of 2.6% seen by China Aviation Oil (Singapore) was probably the result of it having a lower ROE. We believe that there also might be other aspects that are negatively influencing the company's earnings prospects. For example, it is possible that the business has allocated capital poorly or that the company has a very high payout ratio. That being said, we compared China Aviation Oil (Singapore)'s performance with the industry and were concerned when we found that while the company has shrunk its earnings, the industry has grown its earnings at a rate of 14% in the same 5-year period. Earnings growth is a huge factor in stock valuation. The investor should try to establish if the expected growth or decline in earnings, whichever the case may be, is priced in. This then helps them determine if the stock is placed for a bright or bleak future. Has the market priced in the future outlook for G92? You can find out in our latest intrinsic value infographic research report. Is China Aviation Oil (Singapore) Making Efficient Use Of Its Profits? Looking at its three-year median payout ratio of 30% (or a retention ratio of 70%) which is pretty normal, China Aviation Oil (Singapore)'s declining earnings is rather baffling as one would expect to see a fair bit of growth when a company is retaining a good portion of its profits. It looks like there might be some other reasons to explain the lack in that respect. For example, the business could be in decline. Additionally, China Aviation Oil (Singapore) has paid dividends over a period of at least ten years, which means that the company's management is determined to pay dividends even if it means little to no earnings growth. Upon studying the latest analysts' consensus data, we found that the company is expected to keep paying out approximately 30% of its profits over the next three years. Therefore, the company's future ROE is also not expected to change by much with analysts predicting an ROE of 8.2%. Conclusion Overall, we have mixed feelings about China Aviation Oil (Singapore). While the company does have a high rate of profit retention, its low rate of return is probably hampering its earnings growth. With that said, we studied the latest analyst forecasts and found that while the company has shrunk its earnings in the past, analysts expect its earnings to grow in the future. To know more about the company's future earnings growth forecasts take a look at this free report on analyst forecasts for the company to find out more. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Business Times
4 days ago
- Business
- Business Times
China Aviation Oil H1 profit rises 18.4% to US$50 million on higher gross profit and associates' share of results
[SINGAPORE] Asia-Pacific's largest physical jet fuel buyer China Aviation Oil (CAO) posted a net profit of US$50 million for the first half of its financial year ended Jun 30. This was an 18.4 per cent year-on-year increase from US$42.3 million. The growth was attributed to increases in gross profit and share of results from associates, the Singapore Exchange-listed group said on Thursday (Aug 14). Earnings per share jumped 18.1 per cent to US$0.0582 from US$0.0493 previously for the company, which is a key supplier of imported jet fuel to China. CAO attributed the rise in business volume to higher trading volumes of crude and fuel oils. The increase in jet fuel supply volume and optimisation gains from trading activities thus led to a jump in revenue and gross profit. Gross profit was US$30.4 million, a 25.7 per cent increase from US$24.2 million recorded in the same period the previous year. Revenue rose 13.6 per cent to US$8.6 billion, from US$7.5 billion in the first half of 2024, underscored by a 'strong uptick' in demand. Total supply and trading volume went up 35.4 per cent to 13.8 million tonnes in H1 FY2025 from 10.2 million tonnes previously. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The share of results from CAO's associates rose 18.6 per cent to US$27.4 million. This was largely down to higher refuelling volumes from the sole supplier of jet fuel at Shanghai Pudong International Airport (leading to a 13.9 per cent increase in contributions to US$25.5 million), and higher contributions from petroleum complex logistics terminal company Oilhub Korea Yeosu. The volume of middle distillates for H1 grew 18.7 per cent to 7.4 million tonnes from 6.2 million tonnes, while the trading volume of other oil products rose to 6.4 million tonnes, from 4 million tonnes in the same period the previous year. This was due to higher trading volumes of fuel and crude oils. CAO also stated that it has zero net-interest-bearing debt. Outlook CAO chief executive Lin Yi said his company is 'cautiously optimistic' about its medium-term outlook. The company pointed out the International Air Transport Association forecast that the total operating profits for the global civil aviation industry are set to grow 6.6 per cent to US$66 billion this year. It added that relaxed visa requirements across countries in the Asia-Pacific mean that the region is expected to account for 52 per cent of the global aviation industry's revenue passenger kilometre increase. China is set to be a 'significant contributor', accounting for more than 40 per cent of the region's aviation traffic, said CAO. 'CAO remains confident about the aviation industry's trajectory amidst a dynamic global landscape,' said Lin, referring to the geopolitical instability, trade tensions and supply-chain disruptions that were seen in the first half of the year. He added: 'Supported by healthy recovery in the global aviation industry, rising demand across our key markets, and new opportunities posed by the low-carbon business, CAO is well-positioned to benefit from these opportunities.' CAO executive chairman Shi Yanliang stated that the company is also 'committed to' its development goals in the sustainable aviation fuel business, alongside business innovation and strengthened risk management. At the mid-day break on Thursday, shares of CAO were flat at S$1.23 compared with its closing price the previous day.
Business Times
5 days ago
- Business
- Business Times
China Aviation Oil H1 profit rises 18% to US$50 million on higher gross profit and associates' share of results
[SINGAPORE] Asia-Pacific's largest physical jet fuel buyer China Aviation Oil (CAO) posted a net profit of US$50 million for the first half of its financial year ended Jun 30. This was an 18 per cent year-on-year increase from US$42.4 million. The growth was attributed to increases in gross profit and share of results from associates, the Singapore Exchange-listed group said on Thursday (Aug 14). Earnings per share jumped 18.1 per cent to US$0.0582 from US$0.0493 previously for the company, which is a key supplier of imported jet fuel to China. CAO attributed the rise in business volume to higher trading volumes of crude and fuel oils. The increase in jet fuel supply volume and optimisation gains from trading activities thus led to a jump in revenue and gross profit. Gross profit was US$30.4 million, a 25.7 per cent increase from US$24.2 million recorded in the same period the previous year. Revenue rose 13.6 per cent to US$8.6 billion, from US$7.5 billion in the first half of 2024, underscored by a 'strong uptick' in demand. Total supply and trading volume went up 35.4 per cent to 13.8 million tonnes in H1 FY2025 from 10.2 million tonnes previously. BT in your inbox Start and end each day with the latest news stories and analyses delivered straight to your inbox. Sign Up Sign Up The share of results from CAO's associates rose 18.6 per cent to US$27.4 million. This was largely down to higher refuelling volumes from the sole supplier of jet fuel at Shanghai Pudong International Airport (leading to a 13.9 per cent increase in contributions to US$25.5 million), and higher contributions from petroleum complex logistics terminal company Oilhub Korea Yeosu. The volume for middle distillates for H1 grew 18.7 per cent to 7.4 million tonnes from 6.2 million tonnes, while the trading volume of other oil products rose to 6.4 million tonnes, from 4 million tonnes in the same period in the previous year. This was due to higher trading volumes for fuel and crude oils. CAO also stated that it has zero net-interest-bearing debt. Outlook CAO chief executive Lin Yi said his company is 'cautiously optimistic' about its medium-term outlook. The company pointed out the International Air Transport Association forecast that the total operating profits for the global civil aviation industry are set to grow 6.6 per cent to US$66 billion this year. It added that relaxed visa requirements across countries in the Asia-Pacific mean that the region is expected to account for 52 per cent of the global aviation industry's revenue passenger kilometre increase. China is set to be a 'significant contributor', accounting for more than 40 per cent of the region's aviation traffic, said CAO. 'CAO remains confident about the aviation industry's trajectory amidst a dynamic global landscape,' said Lin, referring to the geopolitical instability, trade tensions and supply-chain disruptions seen in the first half of the year. He added: 'Supported by healthy recovery in the global aviation industry, rising demand across our key markets, and new opportunities posed by the low-carbon business, CAO is well-positioned to benefit from these opportunities.' CAO executive chairman Shi Yanliang stated that the company is also 'committed to' its development goals in the sustainable aviation fuel business, alongside business innovation and strengthened risk management. At the mid-day break on Thursday, shares of CAO were flat at S$1.23 compared with its closing price the previous day.
Yahoo
26-07-2025
- Business
- Yahoo
Is There An Opportunity With China Aviation Oil (Singapore) Corporation Ltd's (SGX:G92) 48% Undervaluation?
Key Insights The projected fair value for China Aviation Oil (Singapore) is S$2.26 based on 2 Stage Free Cash Flow to Equity China Aviation Oil (Singapore) is estimated to be 48% undervalued based on current share price of S$1.18 Industry average discount to fair value of 65% suggests China Aviation Oil (Singapore)'s peers are currently trading at a higher discount How far off is China Aviation Oil (Singapore) Corporation Ltd (SGX:G92) from its intrinsic value? Using the most recent financial data, we'll take a look at whether the stock is fairly priced by projecting its future cash flows and then discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. There's really not all that much to it, even though it might appear quite complex. We generally believe that a company's value is the present value of all of the cash it will generate in the future. However, a DCF is just one valuation metric among many, and it is not without flaws. If you want to learn more about discounted cash flow, the rationale behind this calculation can be read in detail in the Simply Wall St analysis model. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. The Method We are going to use a two-stage DCF model, which, as the name states, takes into account two stages of growth. The first stage is generally a higher growth period which levels off heading towards the terminal value, captured in the second 'steady growth' period. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 Levered FCF ($, Millions) US$68.2m US$72.8m US$66.6m US$63.1m US$61.2m US$60.3m US$60.2m US$60.5m US$61.1m US$62.0m Growth Rate Estimate Source Analyst x1 Analyst x1 Est @ -8.55% Est @ -5.27% Est @ -2.98% Est @ -1.38% Est @ -0.26% Est @ 0.53% Est @ 1.08% Est @ 1.46% Present Value ($, Millions) Discounted @ 5.8% US$64.5 US$65.0 US$56.2 US$50.3 US$46.1 US$43.0 US$40.5 US$38.5 US$36.7 US$35.2 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = US$476m We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.4%. We discount the terminal cash flows to today's value at a cost of equity of 5.8%. Terminal Value (TV)= FCF2035 × (1 + g) ÷ (r – g) = US$62m× (1 + 2.4%) ÷ (5.8%– 2.4%) = US$1.8b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= US$1.8b÷ ( 1 + 5.8%)10= US$1.0b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is US$1.5b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of S$1.2, the company appears quite good value at a 48% discount to where the stock price trades currently. Valuations are imprecise instruments though, rather like a telescope - move a few degrees and end up in a different galaxy. Do keep this in mind. Important Assumptions We would point out that the most important inputs to a discounted cash flow are the discount rate and of course the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at China Aviation Oil (Singapore) as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 5.8%, which is based on a levered beta of 0.800. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. Check out our latest analysis for China Aviation Oil (Singapore) SWOT Analysis for China Aviation Oil (Singapore) Strength Earnings growth over the past year exceeded the industry. Currently debt free. Dividends are covered by earnings and cash flows. Weakness Dividend is low compared to the top 25% of dividend payers in the Oil and Gas market. Opportunity Annual revenue is forecast to grow faster than the Singaporean market. Trading below our estimate of fair value by more than 20%. Threat No apparent threats visible for G92. Looking Ahead: Although the valuation of a company is important, it ideally won't be the sole piece of analysis you scrutinize for a company. The DCF model is not a perfect stock valuation tool. Preferably you'd apply different cases and assumptions and see how they would impact the company's valuation. For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Why is the intrinsic value higher than the current share price? For China Aviation Oil (Singapore), we've compiled three relevant factors you should consider: Risks: For instance, we've identified 1 warning sign for China Aviation Oil (Singapore) that you should be aware of. Future Earnings: How does G92's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every Singaporean stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Yahoo
01-07-2025
- Business
- Yahoo
Here's Why We Think China Aviation Oil (Singapore) (SGX:G92) Might Deserve Your Attention Today
Investors are often guided by the idea of discovering 'the next big thing', even if that means buying 'story stocks' without any revenue, let alone profit. Unfortunately, these high risk investments often have little probability of ever paying off, and many investors pay a price to learn their lesson. While a well funded company may sustain losses for years, it will need to generate a profit eventually, or else investors will move on and the company will wither away. So if this idea of high risk and high reward doesn't suit, you might be more interested in profitable, growing companies, like China Aviation Oil (Singapore) (SGX:G92). Even if this company is fairly valued by the market, investors would agree that generating consistent profits will continue to provide China Aviation Oil (Singapore) with the means to add long-term value to shareholders. We've found 21 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free. Generally, companies experiencing growth in earnings per share (EPS) should see similar trends in share price. So it makes sense that experienced investors pay close attention to company EPS when undertaking investment research. Shareholders will be happy to know that China Aviation Oil (Singapore)'s EPS has grown 25% each year, compound, over three years. If the company can sustain that sort of growth, we'd expect shareholders to come away satisfied. Top-line growth is a great indicator that growth is sustainable, and combined with a high earnings before interest and taxation (EBIT) margin, it's a great way for a company to maintain a competitive advantage in the market. EBIT margins for China Aviation Oil (Singapore) remained fairly unchanged over the last year, however the company should be pleased to report its revenue growth for the period of 7.5% to US$16b. That's progress. In the chart below, you can see how the company has grown earnings and revenue, over time. Click on the chart to see the exact numbers. See our latest analysis for China Aviation Oil (Singapore) In investing, as in life, the future matters more than the past. So why not check out this free interactive visualization of China Aviation Oil (Singapore)'s forecast profits? As a general rule, it's worth considering how much the CEO is paid, since unreasonably high rates could be considered against the interests of shareholders. The median total compensation for CEOs of companies similar in size to China Aviation Oil (Singapore), with market caps between US$400m and US$1.6b, is around US$1.2m. The China Aviation Oil (Singapore) CEO received total compensation of just US$260k in the year to December 2024. First impressions seem to indicate a compensation policy that is favourable to shareholders. While the level of CEO compensation shouldn't be the biggest factor in how the company is viewed, modest remuneration is a positive, because it suggests that the board keeps shareholder interests in mind. Generally, arguments can be made that reasonable pay levels attest to good decision-making. If you believe that share price follows earnings per share you should definitely be delving further into China Aviation Oil (Singapore)'s strong EPS growth. Strong EPS growth is a great look for the company and reasonable CEO compensation sweetens the deal for investors ass it alludes to management being conscious of frivolous spending. So this stock is well worth an addition to your watchlist as it has the potential to provide great value to shareholders. However, before you get too excited we've discovered 1 warning sign for China Aviation Oil (Singapore) that you should be aware of. Although China Aviation Oil (Singapore) certainly looks good, it may appeal to more investors if insiders were buying up shares. If you like to see companies with more skin in the game, then check out this handpicked selection of Singaporean companies that not only boast of strong growth but have strong insider backing. Please note the insider transactions discussed in this article refer to reportable transactions in the relevant jurisdiction. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
