Broker Name: CGS International Securities
Date of Report: February 20, 2026
Excerpt from CGS International Securities report.
Report Summary
- China Aviation Oil (CAO) stands to benefit from the planned CNAF–Sinopec merger, which could unlock up to 40% upside in valuation by expanding CAO’s oil trading mandate and potentially absorbing Sinopec’s Unipec trading flows. However, risks of reduced autonomy and earnings compression exist if CAO is folded into Unipec as an execution-only desk.
- The report highlights robust outbound traffic growth, higher associate contributions, and resilient margins supporting strong profits in 2H25 and FY25. The valuation is raised to S\$2.63 per share via a sum-of-parts approach, reflecting CAO’s intrinsic equity value amid potential parent merger developments. Bear-case scenario values CAO at S\$1.09 per share, mainly supported by net cash.
Above is an excerpt from a report by CGS International Securities. Clients of CGS International Securities can be the first to access the full report from the CGS International Securities website: https://www.cgs-cimb.com
