Brokers' take
SIA Engineering | Buy Target price: S$3.31 Aug 1 close: S$3.01 CGS-CIMB, July 31
We think the 22 per cent decline in share price over the past 12 months has been due to SIA Engineering's (SIAEC) exclusion from the STI index since Aug 17 amid structural challenges in airframe MRO (maintenance, repair and overhaul). Now at 18 times 2019's price to earnings ratio (P/E), however, below its 7-year mean of 23 times, SIAEC is more palatable.
Over the longer term, we believe SIAEC is an event-driven stock, awaiting privatisation by SIA. We find very little reason for SIAEC to remain listed. The company has also established itself as a choice engine MRO given the longterm tie-ups with Rolls Royce (RR) and Pratt Whitney (PW), which make no difference whether or not it is a subsidiary of SIA, in our view.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Bank of Singapore takes action against employees for misusing medical benefits
UBS weighs synthetic risk transfer amid capital boost proposals
Oil settles higher on supply concerns in the Mid-East, economic woes subdue gains
S-Reits falter as investors weigh possibility of zero rate cuts in 2024
CapitaLand Investment posts total revenue of S$650 million for Q1
Europe: Stoxx 600 logs best day in three months as banks shine