In a report released yesterday, Jason Sum from DBS maintained a Buy rating on SIA Engineering Co, with a price target of S$3.50.
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Jason Sum has given his Buy rating due to a combination of factors that highlight SIA Engineering Co’s strong position in the market. The company’s recent financial performance, with a net profit that aligns with expectations and surpasses consensus, demonstrates its robust operational momentum. This is further supported by a significant increase in revenue, primarily driven by the repricing of the SIA Group contract, which indicates a positive trajectory despite some margin challenges.
Moreover, SIA Engineering Co benefits from its technological edge and strong business volumes due to its parent company, SIA. The company’s strategic partnerships with leading OEMs position it well for long-term growth in the maintenance, repair, and overhaul (MRO) sector. Additionally, the company’s strategic initiatives, such as its partnership with Air India and expansion plans in Asia, are set to capitalize on the growing demand for air travel in the region. These factors, combined with an upward earnings revision and an increased target price, underpin Jason Sum’s Buy rating.