In a report released yesterday, Hashim Osman from Phillip Securities upgraded SIA Engineering Co to a Buy, with a price target of S$4.06.
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Hashim Osman has given his Buy rating due to a combination of factors, including resilient earnings momentum and attractive valuation after recent share price weakness. He highlights that profits from associates and joint ventures, especially in the engine and components division, have grown robustly on the back of higher engine repair volumes and increased heavy maintenance activity at Changi.
At the same time, he acknowledges ongoing start-up losses in newer subsidiaries but views these as temporary as additional hangar capacity and regional line maintenance operations ramp up. Despite geopolitical risks and slightly lowering the target price to S$4.06 to reflect a more conservative multiple, he expects strong maintenance, repair and overhaul demand, expanded engine capacity, and new GTF-related capabilities to support medium-term earnings growth and justify a Buy recommendation.
In another report released on May 12, DBS also maintained a Buy rating on the stock with a S$3.80 price target.
SEGSF’s price has also changed moderately for the past six months – from S$3.670 to S$3.110, which is a -15.26% drop .