|Bid||3.20 x 0|
|Ask||3.21 x 0|
|Day's range||3.20 - 3.23|
|52-week range||3.15 - 4.21|
|PE ratio (TTM)||21.05|
|Earnings date||1 Feb 2018 - 5 Feb 2018|
|Forward dividend & yield||0.09 (3.51%)|
|1y target est||3.49|
Almost half of its operating expenses are poured on labour. SIA Engineering's (SIAEC) stock price has dipped recently to $3.60 amidst bearishness over the placement of 39 million stocks and the stock's removal from the FSSTI. Firstly, SIAEC must narrow down labour cost increases, so as to serve as a catalyst for an upgrade.
SIA Engineering Company might be getting a headache just finding a way to control its spending. According to UOB Kay Hian analyst K Ajith, cost control remains a challenge for the group and was apparent in its recent quarterly results. To recall, the group's net profit declined 13% YoY in the past quarter.
SIA Engineering Company is expected to face headwinds in the maintenance, repair and overhaul (MRO) space. According to OCBC Investment Research analyst Eugene Chua, the MRO industry is set to drive on a rocky road with lower work content required and longer maintenance intervals on new aircraft/engine models and this could delay recognition of revenue. To offset this, SIAEC has been actively entering into partnerships with original equipment manufacturers for both aircraft and engines.
It inked two agreements with Boeing in the past two years. SIA Engineering Company (SIAEC)'s partnership with airframe original equipment manufacturers (OEM) could provide a first mover advantage to the group. According to DBS Group Research analyst Suvro Sarkar, SIAEC incorporated a fleet management joint venture (JV) with Boeing in 2015, and in 2016 inked another airframe maintenance, repair and operations (MRO) JV with Airbus.
Due to the lack of divestment gains it recorded last year. SIA Engineering Company's earnings for the quarter ending in June crashed by 81.8% to $36.2m, down from the $198.4m net profit it recorded last year. According to the group, last year's net profit was boosted by a gain from the divestment of its 10% stake in Hong Kong Aero Engine Services to Rolls-Royce Overseas Holdings Limited and Hong Kong Aircraft Engineering Company Limited.
The Islamic State of Iraq and Syria (ISIS) recently suffered a major defeat in the old city of Mosul, Iraq. However, as it loses territories in the Middle East, cells of the terrorist group have announced their desire to create a “wilayah” or state in South East Asia.
SIA Engineering Company (SIAEC) lately announced that its existing joint venture with Pratt & Whitney (P&W), Eagle Services Asia, has been selected as the maintenance, repair and overhaul (MRO) facility in Singapore for P&W PW1100G-JM GTF engines, which is one of the two engine options that power the A320neo aircraft family.
It has been selected to provide MRO services to GTF engines. SIA Engineering Company (SIAEC) recently announced that its existing joint-venture with Pratt & Whitney (P&W), Eagle Services Asia (ESA), has been selected as the maintenance, repair and overhaul (MRO) facility in Singapore for P&W’s PW1100GJM PurePower Geared Turbofan (GTF) engines, which is one of the two engine options that powers the A320neo aircraft family. According to OCBC Investment Research, ESA will invest an estimated US$85m to equip the facility in order to perform MRO services on the GTF engines.
SIAEC has a higher ROE than the parent airline. Various reports have stated that Singapore Airlines should divest SIA Engineering (SIAEC) or integrate SIAEC with ST Aerospace as part of its transformational plans. For analysts at UOB Kay Hian, this is not the answer to the airline's woes given that SIAEC has a much higher return on equity (ROE) than the parent airline and it provides a buffer to the airline operations.
SIA Engineering Company (SIAEC) and GE Aviation have agreed to establish a new engine overhaul joint venture based in Singapore. The joint venture will provide a full range of engine maintenance, repair and overhaul (MRO) services for the GE90 and GE9X engines.
It will commence operations at Kansai International Airport. SIA Engineering recently announced that it has established a wholly-owned subsidiary in Japan to provide line maintenance (LM) services at airports in Japan on receipt of relevant approvals from authorities. According to OCBC Investment Research, SIAEC shall commence operations at Kansai International Airport and intends to expand its presence with other service offerings as well as to other airports at a later stage.
SIA Engineering ended its financial year with a bang as it recorded an 88.2% increase in net profit. According to the group, this is due to the 141.6m gain from the divestment of its 10% stake in Hong Kong Aero Engine Services (HAESL) to Rolls-Royce Overseas Holdings and Hong Kong Aero Engineering Company (HAECO). This came as full-year revenue decreased by 0.8% to $1.1b, mainly due to the fleet management.
SIA Engineering posted a higher net profit for the past quarter ending in December, up 5% to $53.6m. Operating profit of $25.2m was $3.8m or 13.1% lower than the same quarter last year. Revenue of $272.3m saw a decrease of $2.9m or 1.1%, mainly from lower fleet management and airframe and component overhaul revenue, mitigated in part by higher line maintenance revenue.
SIA Engineering Company Ltd. has signed the renewal of its comprehensive services agreement with Singapore Airlines Cargo as the existing deal is set to expire this year. "The Company’s support of the SIA Cargo’s freighter fleet covers a broad spectrum of maintenance, repair and overhaul, and support services," the group said. SIAEC CEO Png Kim Chiang said the two groups have a strong and mutually beneficial relationship build over so many years.