CGS-CIMB analyst Raymond Yap reiterated a Buy rating on SIA Engineering Co (SEGSF – Research Report) today and set a price target of S$2.70.
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Raymond Yap has given his Buy rating due to a combination of factors that highlight SIA Engineering Co’s potential for long-term growth. The company’s core net profit has shown a significant year-on-year increase, driven by higher maintenance volumes and increased work scopes, particularly from the legacy A380 fleet. Additionally, SIA Engineering Co’s engine and component businesses have seen a reduction in losses and an increase in profits from associates and joint ventures due to higher work volumes.
Another key reason for the Buy rating is the anticipated renewal of maintenance contracts with its parent company, Singapore Airlines, which could lead to improved pricing and revenue. Despite potential risks associated with the setup costs for new ventures overseas, these initiatives are viewed as foundational for future growth. The company is expanding its maintenance capacity in various locations and implementing an Enterprise Operating System to enhance efficiency. Overall, the strong demand for maintenance, repair, and overhaul services supports a positive outlook for SIA Engineering Co.
According to TipRanks, Yap is ranked #4651 out of 9511 analysts.