Brokers' take

China Aviation Oil Singapore | Buy Target price: S$1.90 June 28 close: S$1.665 RHB Research, June 28

After generating 20 per cent year-to-date return, CAO's share price has been trading sideways amid a lack of M&A-related announcements. However, we maintain that it is on track to deliver strong organic growth over 2017-2019, aided by the rapidly-growing Chinese aviation market and increased business diversification.

Maintain "buy" as the stock continues to trade at undemanding valuations (0.68 times 2017F price/earnings to growth). A strong net cash position always offers inorganic growth scope through earnings-accretive acquisitions, in our view. Downside risks include the opening up of China's aviation fuel market.