China Aviation Oil

[Nick]

CAO purchased 247,000 shares from open market today at $1.56. It had purchased 469,000 shares on Wed and Thurs as well.

CAO purchased shares regularly throughout the bear market cycle. It last purchased shares on March 2010 after which the Company reported sterling set of results in Apr 2010. So I find it interesting that the share buy back program has resumed after a 9 month hiatus. Does this signal an even better 4Q result or does it mean that CAO has no idea what to do with their cash hoard ?

At the moment, CAO holds 5.84 million treasury shares.

(Not Vested)

[Nick]

CAO FY2010 net profit rises 21% to record high of US$54.7 million

http://media.corporate-ir.net/media_file...FY2010.pdf [Media Release]

http://media.corporate-ir.net/media_file...esults.pdf [Results]

http://media.corporate-ir.net/media_file...tation.pdf [PPT Slides]

This marks the 5th consecutive year of profitability growth for the Group. It still maintains its net cash position. Management has mentioned that they are in the preliminary stages of making an acquisition. The Group has been buying back shares regularly and has doubled its full year dividend to 4 SG cents. Profitability is being driven primarily by its associates. While it may be a monopoly in the PRC, jet fuel produced internally will be a key threat. I would expect it to tap into BP and its parent CNAF expertise going forward.

(Not Vested)

[Nick]

CAO repurchased 50,000 shares today between $1.24-$1.25 per share. It currently holds 5.811 million treasury shares with a market value of S$7.2 million.

(Not Vested)

[Nick]

I was reading their latest Annual Report. It is interesting to note that they have generated 5 consecutive years of profit growth. But more surprisingly is that their main source of profitability comes from its associates namely Shanghai Pudong International Airport Aviation Fuel Supply Company Ltd, the exclusive supplier of jet fuel at Shanghai Pudong International Airport (33% equity stake). CAO looks determined to make an acquisition this year to move up the supply chain or diversifying its product offering.

While CAO do monopolize the import of jet fuel in PRC, what will happen if the PRC ramps up its refinery capabilities to produce its own jet fuel and hence render CAO services redundant ? Is this a highly likely scenario ?

Any views ?

[Nick]

CAO repurchased 93,000 shares at $1.41 - $1.42 today. It currently holds 6 million treasury shares or 0.83% of the outstanding float.

[edragon]

May 5, 2011, 6.31 pm (Singapore time)

CAO reports 66.7% jump in Q1 profit

By LYNETTE KHOO


China Aviation Oil (CAO) reported a 66.7 per cent year-on-year jump in net profit for the first
quarter ended March 31, 2011 to US$21.46 million on the back of a strong showing in jet fuel
supply and trading.


Revenue more than doubled to US$1.98 billion from US$985.96 million a year ago. Jet fuel prices
in the first quarter averaged US$114.19 per barrel compared to an average of US$85.91 in the same
period last year.

The total supply and trading volume for jet fuel and other oil products expanded by 50 per cent
to 2.19 million tonnes for the first quarter ended March 31, up from 1.46 million tonnes for the
first quarter last year.

'Growth of our jet fuel trading business was mainly driven by higher trading gains from storage
and freight optimisation activities as well as initiatives such as our trading collaboration with
BP,' said CAO chief executive Meng Fanqiu.

But the management is closely monitoring the risk of volatility following the current high oil
prices.

Mr Meng noted that increased uncertainties caused by the unrest in North Africa, the Middle East
and Japan's quake and nuclear crisis have posed greater challenges for the group's trading
activities.

'CAO will continue to adopt a prudent trading strategy while actively seeking growth
opportunities,' he said.

Shares of CAO fell 2.3 per cent to $1.29.

[Nick]

Good set of result. Didn't expect to see a big swing in their operating profits since they made an operating loss in Q4. Profits from associates looks great - the valuation of the equity stake in Pudong fuel supplier alone could very well exceed CAO market capitalization.

[Nick]

CAO is trading at $0.955 - a price not seen for nearly 2 years - it took a big hit over the past quarter. Surprisingly, the Company has announced a record set of earnings and expansion of its business offering. But prospective investors should watch out for the price of jet fuel since if it drops, its associate company in Shanghai, won't be reporting good results due to inventory price difference. If they do maintain their FY 2010 dividend of 4 SG cents, the current yield stands at 4.19%. I find it strange that the Company repurchased shares when it was trading at $1.20-1.40 level half a year ago but they don't seem keen to repurchase it now ?

(Not Vested)

[Nick]

CAO to invest in greenfield oil storage terminal in Johor, Malaysia

• Total storage capacity of 380,000m3 to be built specifically for CAO’s use

• Investment highly synergetic to CAO’s jet fuel trading business

• Provides platform for CAO to expand gasoil and fuel oil trading businesses

http://info.sgx.com/webcoranncatth.nsf/V...00038DA80/$file/CAO_Media_Release_CAO_to_invest_in_greenfield_oil_storage_terminal_in_Johor_Malaysia.pdf?openelement [Press Release]

CAO share price has decreased sharply over the past 6 months and closed at $0.855 which implies a market capitalization of $613 million. CAO has reported strong growth in profits over the past 5 years mainly driven by share of profits from its China-based associates. The Group generated US$40.7 million net profit in 1H 2011. It recently inked deals to expand its business with fuel supply agreement with Turkish Airlines outside of the PRC. It will be interesting to see how the Group copes with the decline in oil prices in 2H 2011 and whether it will pay an interim dividend in 3Q 2011 (2 cents in 3Q 2010).

(Not Vested)

[Nick]

CAO appoints Chief Operating Officer

SINGAPORE, 7 October 2011 – China Aviation Oil (Singapore) Corporation Ltd (“CAO”), the largest physical jet fuel trader in the Asia Pacific region, wishes to announce the appointment of Ms Jean Teo Lang Lang as Chief Operating Officer of CAO from 1 November 2011.

http://info.sgx.com/webcoranncatth.nsf/V...200354BB2/$file/CAO_Media_Release_Appoints_of_COO.pdf?openelement [Full Press Release]

It would seem that CAO is extremely serious about growing its trading business in Asia-Pacific.

CAO share price closed at 91.0 cents today.

(Not Vested)