Why Chinese Aviation Oil banks on overseas refueller for steady growth

The business accounts for 90% of CAO’s earnings from associates.

Overseas refueller Shanghai Pudong International Airport Aviation Fuel Supply (SPIA) is slowly taking a larger share in Chinese Aviation Oil’s profit, accounting for almost 61% of earnings in 2015 and 62% at the first half of 2016.

RHB revealed that CAO owns 33% of SPIA, which accounts for 90% of its earnings from associates.

“SPIA also pays almost all of its earnings as dividends. The firm has witnessed strong growth in aircraft traffic over the past two years,” RHB said.

SPIA is expected to benefit from the rise of Shanghai as a financial centre and the opening of tourist attractions such as Disneyland, RHB added.