The little things that SATS do to entrench its presence

Just recently, SATS announced its intent to acquire BAC; a dominant caterer in Malaysia. In my Sleeping Dragon post, I mentioned that SATS has an excellent reach and market share in the industry. 

In-flight caterer/Ground Services - Market Share

(*New) Malaysia - 95% of In-flight catering
Singapore - 80%

Vietnam - 75%

Maldives - 70%

India - 67%

China - 60% 

Japan - 50% in Narita, 40% in Haneda

Hong Kong and Taiwan - 30%

Macau - 100% (only in-flight caterer)

With that, SATS further strengthened its footing in the region. BAC's major customers includes Malaysian Airlines, Air Asia and Cathay Pacific.

Risks
However, there's also risks to think of.
1. Currency risk
2. Malaysian Airlines ailing business
3. Malaysia's air traffic growth

However, I'm not overly concerned with those, bearing in mind that the profits of BAC would constitute less than 2% of SATS' total profits. The financial risks are immaterial.

What's important to me is that act of "capturing" new regions and being the market leader in them. The qualitative step is what interests me.

Q2 results peek!
Singapore's aviation data was released:

SATS' main profit drivers is the Food Solutions segment. 

Q1 saw the Meals produced increased by 2.5%. Q2's result doubled.
Q1's profits soared 14.5% despite a drop in revenue (due to cost savings).

I expect the cost savings to continue due to productivity gain, coupled with the excellent set of Food Solutions and Gateway services (Q1 registered a drop in Gateway), Q2 should be an excellent quarter for SATS.