SIA Engineering Co (S59) AI Stock Analysis

• Market Cap: S$3.70B
• Dividend Yield: 2.42%
• Average Volume (3M): 1.28M
• Price to Earnings (P/E): 26.2
• Beta (1Y): 0.71
• Revenue Growth: 13.79%
• EPS Growth: 44.05%
• Country: SG
• Employees: 6,253
• Sector: Industrials
• Sector Strength: 94
• Industry: Airlines, Airports & Air Services
• EPS (TTM): 0.04
• Shares Outstanding: 1,124,116,300
• 10 Day Avg. Volume: 1,455,490
• 30 Day Avg. Volume: 1,276,153
• PEG Ratio: 5.54
• Price to Book (P/B): 2.17
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 47.80
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: S$3.34
• Price Target Upside: 2.10% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 63 Neutral
• Price Target: S$3.00 ▼(-8.26%Downside)

SIA Engineering Co's overall stock score is driven by strong financial performance, with robust revenue growth and a solid balance sheet. However, technical indicators suggest the stock is currently overbought, posing a risk of near-term price correction. The valuation is on the higher side, indicating limited immediate upside unless there is significant earnings growth. The absence of notable earnings call data or corporate events did not impact the score.

Positive Factors

Contract and Revenue Impact

The new contract with SIA and Scoot implies a significant uplift in annualised labor revenue for SIAEC.

Revenue Growth

Revenue rose 33.4% y/y to SGD358.4mn, exceeding expectations, largely driven by the repricing of the SIA Group contract.

Strategic Partnerships

The strategic partnerships with leading OEMs like GE, Safran, Rolls-Royce, and P&W position SIAEC favorably for long-term growth.

Negative Factors

Consumer Sentiment and Supply Chain

Weaker consumer sentiment leading to capacity cuts and deferral of MRO in Asia, and supply chain bottlenecks are key risks that could dampen SIA Engineering Co's volumes or increase costs.

Market Valuation

There was a downgrade to HOLD following the recent share price surge, suggesting the stock is fairly valued.

Operating Performance

Operating profit missed expectations, showing no obvious margin improvement despite the contract renewal with Singapore Airlines.

SIA Engineering Co Business Overview & Revenue Model

Company Description

SIA Engineering Company Limited, together with its subsidiaries, provides maintenance, repair, and overhaul (MRO) services to airline carriers and aerospace equipment manufacturers worldwide. The company operates through two segments, Airframe and Line Maintenance; and Engine and Component. The Airframe and Line Maintenance segment provides airframe maintenance, line maintenance, and fleet management programs. Its services include scheduled routine maintenance and overhaul, specialized and non-routine maintenance, and modification and refurbishment programs; aircraft certification and technical and non-technical ground handling services, such as push-back and towing, as well as the provision of aircraft ground support equipment and rectification work; and fleet technical management and inventory technical management services, which include the provision of engineering and MRO solutions. The Engine and Component segment provides component overhaul, and engine repair and overhaul services. SIA Engineering Company Limited also manufactures aircraft cabin parts and tooling for the aerospace industry; and provides repair and overhaul services for hydro-mechanical equipment for aircraft. In addition, it offers engine maintenance, parts repair, storage and preservation, material management, on-wing, and engine testing services. The company was incorporated in 1982 and is based in Singapore. SIA Engineering Company Limited is a subsidiary of Singapore Airlines Limited.

How the Company Makes Money

SIA Engineering Co. generates revenue through its diversified MRO services, which are categorized into line maintenance, base maintenance, and component and engine services. Line maintenance involves routine inspections and minor repairs performed on aircraft at airports, which provides a steady stream of income due to the frequent and necessary nature of these services. Base maintenance involves more extensive work such as scheduled heavy maintenance checks and modifications, typically carried out at the company's facilities, which commands higher service fees. Additionally, the company earns revenue from component and engine services, including repair and overhaul of individual aircraft components and engines, which are critical to maintaining operational efficiency and safety. Key partnerships with major airlines and aircraft manufacturers enhance its service offerings and client base, contributing significantly to its earnings. The company also benefits from its geographical advantage in Singapore, a major aviation hub, which attracts international clients seeking high-quality MRO services.

SIA Engineering Co Financial Statement Overview

Summary

SIA Engineering Co exhibits a solid financial position with strong revenue growth and improved profitability margins. The balance sheet reflects low leverage and a strong equity base, enhancing financial stability. Meanwhile, cash flow growth and efficient cash generation underscore the company's operational effectiveness. Opportunities include further improving EBIT margins and leveraging its strong cash position for strategic growth.

Income Statement

SIA Engineering Co has shown a healthy revenue growth of approximately 13.8% from 2024 to 2025, along with a strong net profit margin of 11.21% for the latest year. However, gross profit margins have remained stable, indicating room for improvement in cost management. The company has improved its EBIT margin to 1.17%, moving from a loss-making EBIT position in previous years. EBITDA margin improved significantly, suggesting better operational efficiency.

Balance Sheet

The company maintains a strong balance sheet with a debt-to-equity ratio of 0.05, indicating low leverage, which mitigates financial risk. Return on equity stands at 8.11%, showcasing moderate profitability on shareholders' equity. The equity ratio is high at 80.32%, reflecting a solid equity base, which enhances financial stability and reduces bankruptcy risk.

Cash Flow

Operating cash flow increased to 167 million, showing robust cash generation capabilities. Free cash flow also grew significantly by 98.3% from the previous year, indicating potential for reinvestment or debt reduction. The operating cash flow to net income ratio is 1.20, signifying good quality earnings with strong cash backing.

Breakdown	Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement
Total Revenue	1.25B	1.09B	795.97M	566.09M	442.99M
Gross Profit	305.90M	305.90M	235.95M	183.70M	144.27M
EBITDA	214.90M	63.66M	131.45M	36.03M	-1.35M
Net Income	139.60M	97.12M	66.39M	67.61M	-11.25M
Balance Sheet
Total Assets	2.14B	2.09B	1.98B	1.84B	1.81B
Cash, Cash Equivalents and Short-Term Investments	663.40M	645.95M	632.99M	625.48M	615.96M
Total Debt	85.20M	110.44M	115.19M	69.73M	84.08M
Total Liabilities	399.90M	385.11M	306.64M	216.79M	265.48M
Stockholders Equity	1.72B	1.69B	1.67B	1.61B	1.53B
Cash Flow
Free Cash Flow	102.60M	51.72M	4.98M	5.91M	145.40M
Operating Cash Flow	167.00M	100.40M	64.61M	29.20M	165.79M
Investing Cash Flow	-14.80M	30.81M	-19.46M	15.75M	22.82M
Financing Cash Flow	-134.70M	-117.80M	-37.10M	-35.74M	-89.76M

SIA Engineering Co Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 3.27
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:S59, the sentiment is Positive. The current price of 3.27 is above the 20-day moving average (MA) of 3.23, above the 50-day MA of 2.99, and above the 200-day MA of 2.49, indicating a bullish trend. The MACD of 0.09 indicates Positive momentum. The RSI at 61.28 is Neutral, neither overbought nor oversold. The STOCH value of 66.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SG:S59.

SIA Engineering Co Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
S63	83 Outperform	S$27.61B	36.71	27.51%	1.35%	11.63%	19.71%
BS6	74 Outperform	$9.84B	7.99	28.14%	2.25%	7.88%	58.71%
U96	73 Outperform	$13.95B	13.70	20.60%	1.74%	-8.88%	8.31%
Sector *	65 Neutral	$11.06B	15.73	5.16%	1.93%	3.12%	-25.59%
S59	63 Neutral	S$3.70B	26.24	8.24%	2.42%	13.79%	44.05%
S58	63 Neutral	$5.02B	20.66	9.89%	0.88%	12.54%	332.80%
5E2	51 Neutral	$8.32B	52.93	2.48%	0.62%	26.60%	―

SIA Engineering Co Corporate Events

SIA Engineering Announces Board Committee Changes

SIA Engineering Company Limited has announced the appointment of Mr. Ng Chee Khern as a member of its Board Safety & Risk Committee, effective from June 25, 2025. This change is part of a broader restructuring of the company’s board committees, which aims to enhance governance and oversight, potentially impacting the company’s operational efficiency and stakeholder confidence.

The most recent analyst rating on (SG:S59) stock is a Buy with a S$2.80 price target. To see the full list of analyst forecasts on SIA Engineering Co stock, see the SG:S59 Stock Forecast page.

SIA Engineering Secures $1.3 Billion Services Agreements with Singapore Airlines and Scoot

SIA Engineering Company has signed new Comprehensive Services Agreements with Singapore Airlines and its low-cost subsidiary, Scoot, which replace previous agreements from April 2023. Effective from April 1, 2025, these agreements are set for a two-year term with an option to extend for one more year, and they are expected to generate $1.3 billion in labor revenue. This development is significant for SIAEC’s business as it strengthens its position in the MRO industry and reinforces its strategic partnership with major airlines, potentially impacting stakeholders positively.

The most recent analyst rating on (SG:S59) stock is a Buy with a S$2.80 price target. To see the full list of analyst forecasts on SIA Engineering Co stock, see the SG:S59 Stock Forecast page.