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SKG [BUY +29.0%] - Despite competitive threats, SKG remains market leader - Update

We lower our target price for SKG by 10.1% due to disappointing Q1 results resulting from higher than expected input fuel costs (+46% vs Q1 2016). However, we keep our BUY rating as we remain bullish on the company’s new Con Dao route and a more flexible fleet and schedules should differentiate it from rivals.We expect 2017 revenue growth of 13.1%, mainly driven by continued growth in travel demand to Phu Quoc. In Q1 2017, total visitor numbers to Phu Quoc rose by 9.0% YoY.