Phillip Securities analyst Hashim Osman maintained a Buy rating on SIA Engineering Co today and set a price target of S$4.14.
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Hashim Osman has given his Buy rating due to a combination of factors tied to SIA Engineering’s earnings resilience and growth prospects. He highlights that profit contributions from associates and joint ventures have expanded by over 20% year on year, driven mainly by the engine and component segment, with additional support from rising line maintenance activity as Scoot’s traffic and route network continue to grow.
He also notes that the company maintains a very solid net cash position of roughly S$490mn and minimal gearing, providing ample capacity to absorb start-up losses from new subsidiaries and to fund regional expansion initiatives. While operating expenses have risen on the back of higher volumes, IT implementation, and ramp-up costs, he believes these are transitional and are outweighed by the strong balance sheet, improving margins, and long-term growth catalysts such as the upcoming Malaysia base maintenance hangar and the planned LEAP engine MRO joint venture in Singapore.
In another report released today, TipRanks – PerPlexity also initiated coverage with a Buy rating on the stock with a S$4.00 price target.