First Read: SATS "Evaluating potential new tariffs impact on PATMI" (Buy) Leong

Research evidence excerpt

First Read: SATS "Evaluating potential new tariffs impact on PATMI" (Buy) Leong

stimate negative impact to FY27E PATMI is about 6.1% at UBS Cons.

17.7% EBITDA margins. Other UBSe assumptions including estimates from FY28E 03/27E 0.21 0.22

onwards remain unchanged. 03/28E 0.25 0.25

03/29E 0.29 0.28

Assessment of previous US tariffs impact; other business segments not to be

forgotten Melissa Leong

Analyst

Early last year we wrote a report assessing the impact of US tariffs on SATS while melissa.leong@ubs.com

upgrading the stock to a Buy rating. We believe that air cargo demand is supported by +65-6495 6773

shipment growth from high value-added goods (e.g., semiconductors, servers) which

Rachael Tan

contributed a significant portion of cargo volume, as well as continued cross-border e-

commerce growth given the strong value-for-money proposition of Chinese platform rachael.tan@ubs.com

goods. Hence, we think a severe disruption in volumes is unlikely in the near term, +65 6495 7951

limiting the impact of SATS operating deleveraging. We also noted that SATS still has

Perry Yeung

other 50% (ground handling and food solutions) of its revenue driven by tourism (and Analyst

less tariffs), which we think will continue to be strong. More recently, UBS Evidence Lab's perry.yeung@ubs.com

Air Travel Consumer Survey, conducted in April-May 2026 amid the Middle East conflict +852-2971 6349

and surging airfares, suggests relatively stable and inelastic flight demand, potentially

signalling that consumers' willingness to pay may have been underestimated. We see

this as a positive read-through for SATS.

Valuation: Buy at $5.17

We have a Buy rating on SATS at 25x implied PE.

Highlights (S$m) 03/24 03/25 03/26 03/27E 03/28E 03/29E 03/30E 03/31E