SIA Engineering

[LenaHuat]

Hi Winston
Great, you have re-set things here. I hope MW, cif5000 and mrEngineer will continue to contribute to this forum. I am sure I irritate K with my postings in the Genting thread given his position against the casinos. But he respects my views. And I am sure we can give everyone all the space they want here. We have enuff $$ to last for ??? years??

[kennynah]

hahaha L

you dont irritate me at all on your views on genting .... your stand about having theme parks here does not conflict with my position about casinos on our shores...but even if we had differing stand on this issue, i can live with it.... we are different people...and different people have differing views....

as long as we don't spit at each other, call names, etc....

it's fine

[cif5000]

Just print and present this to any mama-store to get your free beer. Remember these important steps,

1. Take the ice-cold beer from the fridge (ok, just one pint)
2. Give the store keeper the coupon
3. Run if he starts to stare at you
4. Run faster if he starts chasing.

Enjoy, and you guys stay cool.

[Musicwhiz]

Dear all, Part 2 of my Analysis of Purchase for SIA Engineering is now up on my blog! Please feel free to visit and leave comments, thanks!

A snippet as follows:-

"Airframe Maintenance and overhaul sub-division facilities comprise of 5 hangars with a combined total of 8 bays and total floor area of approximately 43,200m2. With these facilities, we are able to provide total support solutions to our growing portfolio of third party customers.

Component maintenance and overhaul sub-division has 22 workshops which test, repair and overhaul components including those removed from the aircraft in the hangars."

[winston]

Not vested. From Kim Eng:-

SIA Engineering (SIE SP, $4.60, BUY, TP $5.00)

The post‐recession rebound in air traffic from 2H09 is entering a more difficult period of comparison.

International air traffic appears headed for a slower phase of growth, but we believe stability, and not a sustained decline, can be expected.

The threat of a double dip is there but not immediate, in our view. Further, airlines are finally starting to add capacity and while this could affect load factors, it should not
be alarming as long as air traffic continues to grow.

http://www.remisiers.org/cms_images/res ... t_Asia.pdf

[Musicwhiz]

Kim Eng jumping the gun as usual - recommending people purchase the stock based on 20x PER. I guess there's no such thing as a "Patience" department within a brokerage house which tells people to "wait for the fundamentals to catch up with current valuations". If not, I guess everyone there would be out of a job.....

There are signs of exuberance slowly (but surely) creeping into markets. It all starts with the overly-excited brokerage reports, flows through to "sure-win" IPOs (GLP and MIT anyone?) and ends up with ridiculous stratospheric valuations of small/mid-caps. Most of this is gradual, but the recent outward signs are difficult to ignore......

[tonylim]

DBSV S'pore

SIA Engineering: BUY; S$4.51; Bloomberg Code: SIE SP
More wings to fly

Price Target : 12-Month S$ 5.10 (Prev S$ 4.60)

by: Suvro Sarkar +65 6398 7973


Wins new Airbus contract for SIA A340 fleet

Aviation recovery continues unabated, led by demand from
Asia-Pacific region

Valuations undemanding compared to HK-listed peer HAECO despite YTD
outperformance

Maintain BUY with revised TP of S$5.10 as we roll-over our basis to
blended FY11/12F

Another contract in the bag. SIA Engineering – as a member of the Airbus MRO network – has been awarded a 6-year support package contract by Airbus to provide complete support package for SIA’s fleet of 5 Airbus A340-500 aircraft.

MRO services will include fleet management, heavy and light MRO checks, line maintenance and cabin modification. This follows an earlier contract in 2008 when Airbus had selected SIAEC to provide similar services for SIA’s A330 fleet. We estimate the contract could be worth S$30-50m, adding further visibility to the growth pipeline.

As the industry outlook continues to be bullish, with the IATA now predicting airline industry profits of US$8.9b in 2010, primarily led by Asia-Pac carriers. In the first 5 months of SIE’s financial year FY11
(Apr-Aug), Changi Airport has seen the number of flights increasing by 11% y-o-y, driven by a 24% increase in visitor arrivals during the same period.

This augurs well for the health of SIA and other regional carriers, and presents potential upside to SIE’s line maintenance division earnings for FY11/12.

Revise TP upwards to S$5.10. As peer HAECO continues to re-rate, SIE – despite outperforming the market YTD on the back of strong aviation recovery momentum – now looks cheaper in comparison and is trading at a unjustifiably bigger than usual 35% valuation discount to HAECO.

Hence, we re-rate the stock, albeit still at a 20% discount to HAECO’s valuations, while rolling over our basis to blended FY11/12 numbers. Our TP is thus revised upwards to S$5.10. Maintain BUY.

(Document link: Singapore Research)

[Musicwhiz]

Dear all, Part 3 of my Analysis of Purchase for SIA Engineering is now up on my blog! Please feel free to visit and leave comments, thanks!

A snippet as follows:-

"What’s interesting is that even though share of profits did not increase evenly and steadily over the years, if we glance at cash flows (i.e. dividends) we can see a very clear upward trend over the years. Dividends starts from zero in FY 2000 and increases steadily over the years to a record S$153.3 million in FY 2010, and did not seem to be affected by the dip in share of profits for FY 2010."

[Musicwhiz]

Dear all, Part 4 of my Analysis of Purchase for SIA Engineering is now up on my blog! Please feel free to visit and leave comments, thanks!

A snippet as follows:-

"Looking at HAECO’s cash flows (only 8 years were used as FY 2001’s Annual Report was not available for download on the Company’s website), it can be seen that there was also FCF generated every financial year, similar to SIAEC. However, unlike SIAEC, investing cash flows have been mostly negative (for the last 5 years out of the 8 years under review); and capex is also pretty high as a % of revenues as it more recently (in the last 5 years) averaged about 17.6%. On the other hand, SIAEC’s capex averaged just 5% of revenues for the ten years under review, which demonstrates the robustness of SIAEC’s strategy of using alliances and joint ventures to reduce capex commitments for the Group."

[winston]

Not vested

SIA ENGINEERING - SIA Engineering reported its second quarter net profit rose 8.8 percent to S$66.5 million from a year ago, on the back of higher sales from airframe and component overhaul work.

Its revenue rose 11.7 percent to S$277.1 million in the July-September period from a year earlier.


Source: Reuters