Upgrade to OW: SIA is in its worst earnings cycle in history with a high probability of reporting losses for the next two quarters which explains its underperformance versus the market year-to-date. Although we remain bearish on the near term outlook and the timing and quality of the rebound remains uncertain, we believe that its potential correction in the upcoming results and/or the worsening impact from Influenza A would provide a good opportunity to accumulate in preparation for a cyclical upturn. For more risk averse investors, SIA is also the “safest” choice in the sector given its well-capitalized balance sheet, strong track record at managing costs during downturns and ability to unlock more value from subsidiaries/associates such as SIE, Tiger Air in the longer term, and M&A forays that could lift market sentiment even though they may not necessarily be value-enhancing.
Potential longer-term value in SATS: Stock is effectively trading cum dividend of S$1.77/share. Buying SIA now entitles shareholders to 0.73 SATS share for every 1 SIA share. Although shareholders may not necessarily realize the value of SATS near term due to potential share overhang as free float would rise from 19% to 45%. However, applying mid-cycle airport valuations on SATS of c.18x P/E would imply a potential fair value of c.S$2.40/share longer term.
Long-term prospects: SIA is one of the best-managed airlines with strong pricing power and a highly efficient cost structure in our view. It is also the only Asian airline with a net cash balance and has been returning more capital to shareholders in recent years. However, we believe SIA is a mature airline with more limited growth prospects than Cathay and its market share at its home base should gradually diminish as low cost carrier penetration grows. We see risks entering M&A deals that may not be value-enhancing.
PT, valuation, key risks: We have raised our PT to factor in SIA’s improving earnings outlook in the next 12 months. Our ex-div Jun 2010 PT of S$14 is based on 1.2x P/BV, SIA’s average valuation since 2003 when its competitive environment intensified with the entry of low cost carriers and Emirates' increased presence in Singapore. Key risks: 1) WHO issues travel restrictions due to Influenza A, 2) stagflation, 3) making value-destroying investments.
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SIA
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SIA on steroids har ??
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tedlim_me
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31-Jul-2009 16:09
Yells: "there is no equity in the equity markets" |
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i did.. but i offloaded it at $10. argh!
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wongmx6
Veteran |
31-Jul-2009 16:02
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I wish i have chance to buy it at $9.00 | ||||||||
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wongmx6
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31-Jul-2009 16:00
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Illogic. Yesterday report loss, paint poor outlook, Cut workers paid. But Today Share price is going higher. |
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hp3000
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31-Jul-2009 14:25
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Inview of Cargo had shown further improvement. For passenger wise it had fallen due to H1N1 and econmic downside. But inview of H1N1 it has start spreading fast around the world. Very soon all the country will has this H1N1 evently spread. So any where got H1N1 it will make no much difference you travel or no. Passenger will start to picking up soon as economic is on the way to recovery state also. Share now 13.48 
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hp3000
Senior |
31-Jul-2009 11:22
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come up !! SIA will be alway in the top few. Don't worry about for long term. Some more it was old man lee pet keke... Panic people throw to low at 13.16 see now back to 13.44. Want to buy at lowest $ also can't pick up... It jump so fast Net loss of $307 million to SIA is nothing much also most airline make a loss this year and even close down. The lost was expected. See the dividen given 0.2 cent plus 0.73 share of SATS will know that SIA is still strong and steady. | ||||||||
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el7888
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30-Jul-2009 19:11
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hp3000
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29-Jul-2009 11:01
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This old man LEE bird flying high today morning at 13.68 but got panic people throw to drop at 13.62 when sti turn red. Now flying up again 
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hp3000
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29-Jul-2009 10:59
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Remember the old man LEE case in 2004 Pilot Ryan Does it change things? Fears that it will reverse Singapore's 'opening up' seem exaggerated. Here's why. By Seah Chiang Nee. Mar 14, 2004 MONTHS away from his son becoming premier, Senior Minister Lee Kuan Yew has acted to revoke the permanent resident status of a Malaysian citizen for "instigating" a labour dispute. It’s the first time since 1990, when he stepped down as Prime Minister, that such action has been taken. SIA pilot and union representative Ryan Goh Yew Hock, who has lived here for 26 years, was accused by SM Lee of trying to instigate a union revolt against the government-controlled airline. The subsequent cancellation of his PR status - pending the outcome of his appeal - was seen as a warning to foreign residents not to meddle in domestic issues. In the 60s, this would have passed as a non-event by people who knew him well. But in the 21st century, with a whole new generation of better educated citizens, what he did has caused concern - even anger - among people who know little about his role in history. The episode has given rise to complications, which veteran People’s Action Party (PAP) MP Tan Cheng Bock brought up in Parliament. Firstly, Singaporeans felt disquiet that Lee had to step in and, secondly, it raised questions in people’s minds about the younger ministers’ capability to handle such problems, Tan said. He was reflecting what the public generally felt. People were asking: Why did Prime Minister Goh Chok Tong or the minister in charge keep quiet when it was happening? Were they agreeable to SM Lee’s action? SM Lee had accused the Malaysian-born pilot of being the "chief instigator" behind the move to sack the SIA pilots’ union leadership after it had approved pay and job cuts during the SARS crisis. Unhappy with the union’s concession, the majority of members eventually did just that. The plan was for a new team to confront SIA in forthcoming negotiations. Ryan Goh, Lee alleged, had "surreptitiously" taken actions "that would undermine industrial peace in SIA and also put the economic interests of Singapore at risk". Lee revealed that Goh had accepted permanent residence in Australia, bought a house in Perth, moved his family and car there - and sold his flat in Singapore. It implied he was preparing an escape route should things go wrong. Lee told the pilots: "It is not just SIA that goes down, but you go down, too." He added that it was different for permanent residents such as Goh because they could "opt out". To some critics, it raised a bigger question of a possible change of leadership style after the milder Goh Chok Tong retires as premier, probably this year. The elder Lee’s move came just after his son had promised in a newspaper interview to continue with the process of opening up society on taking over. SM Lee had also said he would remain in his present position after the changeover. Despite his declining health, the 80-year-old Lee has been enhancing his political role in recent months that seemed to show dissatisfaction with the way some things were run. He had stepped in to take charge of the SIA labour conflict, evidently on feeling that his younger colleagues were too soft or hesitant in dealing with it and allowing a potential threat to build up. With his mind still quick and alert, Lee had earlier declared that Singapore was too small for two competing domestic television networks. Then he reportedly called up editors and journalists of a daily tabloid for a tongue-lashing session. In an interview obviously targeting his younger ministers, Lee said he did not believe in a populist government whose policies were just to win votes. This was not something new. In the past, he had said that Singapore would have been in trouble if his actions were based on meeting public demands. Long before he stepped down, he had been advising his successor on the need to run a "tight ship" and once chided Goh for not being firm enough. Lee had ruled with two ingredients - superior logic and fear - which transformed Singapore from a poor, squalid city with high unemployment and low education into an affluent, global city. Many in Singapore’s heartland, especially the baby-boomers, still admire him but youths, raised under new circumstances, think differently. Does his handling of the SIA dispute mean that Singapore is reverting to Lee’s authoritarian past? The answer is no. It’s not possible. The trend is towards a more open society. I believe pilot Goh’s case was a one-off action rather than the beginning of a new political trend. It came because of Lee’s personal conviction that, unless firmly handled, this dispute would lead to a dangerous confrontation with far-reaching impact for Singapore’s economy. SIA is no ordinary company. On its shoulders lies the bulk of the city’s tourism industry and up to 100,000 jobs. Living with constant dangers had made what Lee is - even today. He has a suspicious mind that makes him act when others debate. On spotting danger signs, as in the case of the SIA dispute, his instinct is to act firmly and if he erred, it would be erring on the side of caution. However, what he did and how he ruled are less relevant today. It is unlikely to be how his son, Hsien Loong, will behave when he takes over. The troubles confronting Singapore and the new economic necessities, both globally and internally, have changed dramatically. So have Singapore’s highly educated population and even the ruling PAP. Where Kuan Yew had used logic and the stick, Hsien Loong has to resort to persuasion. The stick (tough, punishing laws) could be effective when Singapore was dealing with communists, violent extremists, kidnappers or simply people who spit. But legislation alone cannot be relied on to resolve today’s type of pressing problems of citizens’ emigration, marriage and procreation, work ethics, loyalty and promoting entrepreneurs - which is what the new leader is faced with. For that persuasion must take precedence. The process of de-control, I believe, will continue steadily and, at times, hesitatingly. The question is not 'if' but 'how fast', especially in the political arena where it's a lot slower. Critics want a faster pace. (This is an update of an article published in Sunday Star). | ||||||||
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hp3000
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29-Jul-2009 10:58
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Don't worry lah !!! Haha sia is like old man lee bird... if it turn into small bird SM Lee will let it become big bird again haha  SPEECH BY MINISTER MENTOR LEE KUAN YEW AT THE LAUNCH OF THE NEW CIVIL AVIATION AUTHORITY OF SINGAPORE AND THE CHANGI AIRPORT GROUP ON 1 JULY 2009 I am happy to launch the new Civil Aviation Authority of Singapore and the Changi Airport Group. The civil aviation industry is one of the key drivers of Singapore’s economy. The success of Changi Airport, Singapore’s SIA and Silk Air, the MRO (maintenance, repair & overhaul) and air cargo sectors, and the spin-offs in trade, tourism and investments, they all have added significantly to our growth. Our passenger handling capacity was less than 10 million per annum in 1980 at the old Paya Lebar airport. It has increased to nearly 70 million passengers per year at Changi Airport. Seven million passengers passed through Paya Lebar in 1980. Over 37 million people passed through Changi in 2008, through three full service terminals and a budget terminal. Cargo traffic has grown ten-fold from 180,000 tonnes per annum in 1980 to 1.9 million tonnes today. One of the best investments we made was to write off the $800 million sunk into Paya Lebar Airport which we handed over to the RSAF, and to build Changi Airport with two runways for $1.5 billion, which was then big money. The decision was made in 1975. If I had not intervened and we had built the second runway at Paya Lebar airport as our foreign experts recommended, Singapore’s airport could not have become an air hub. Changi Airport has set the benchmark for service excellence and operational efficiency internationally. It has won over 300 awards since 1987, including 13 awards in the first half of 2009. CAAS is recognised as an important contributor to global civil aviation at international meetings. Since becoming a Council Member of the International Civil Aviation Organisation (ICAO) in 2003, Singapore has participated in 60 ICAO expert bodies, chairing 10 of them. CAAS is also active in other international organisations, including the Airports Council International and the Civil Air Navigation Services Organisation. However, it would be a mistake to believe that past achievements will guarantee our continued success in the years ahead. Competition amongst air hubs is increasing with new mega-airports in the region like the Beijing Capital International Airport, Shanghai’s Pudong Airport, Incheon International Airport and Dubai International Airport. Our competitors are catching up, with some beginning to equal, if not outperform us in certain areas. The government has decided to corporatise Changi Airport in 2007 to meet the challenges ahead. Airports are run like business entities. They aim to be regional hubs. Airlines are re-examining their business models, especially after the proliferation of low-cost carriers in the region. Changi Airport, SIA, Silk Air and low-cost carriers Tiger Airways and Jetstar Asia Airways have to improve the way they operate to compete in the international premier league. For the present, the aviation industry is in survival mode, with record-high fuel prices last year and an on-going global recession. The demand for air travel and services has dropped drastically. We see plunging airfares, falling demand for airlines’ premium products and deteriorating cargo loads. All these are hitting airlines hard on their bottom lines. During its recent meeting in Kuala Lumpur, the International Air Transport Association (IATA) said recovery will be tough and that the industry will have to innovate to find ways to pull through this crisis. We must restructure and strengthen our airport operations and regulatory system. When recovery comes, Singapore’s aviation sector must be ready to meet the new challenges. The economic crisis has seriously dampened air travel. But once the global economy recovers, the aviation industry will bounce back. Emerging economies in Asia and the Middle-East will lead the next wave of demand for air travel. We have to be ready for this. As airport users become more discerning and demanding, our service excellence and know-how must enhance the Changi Experience. Another opportunity is the emergence of low-cost carriers in Asia. They provide an attractive alternate mode of international travel for the growing numbers of Asian middle-class consumers. To compete, Full Service Carriers have to re-examine their business models and form new alliances or mergers. Changi Airport and SIA must not be left behind in the different operating environment. The restructured CAAS will have better focus as an industry regulator, with greater capabilities to develop new areas for vibrant growth. It must work closely with the corporatised Changi Airport Group to promote Singapore as an air hub; and to plan the future expansion and development of Changi Airport infrastructure. The corporatised Changi Airport Group must have the drive and initiative to capitalise on the new opportunities and meet the increasing competition. As a corporation, it is better able to aggressively pursue overseas business ventures and investment opportunities. It has the advantage of Changi as a brand name to enlarge its international presence. This will give greater flexibility to respond quickly to changes in the industry and in the global business environment. It will also attract and retain top talent to compete with global airport operators. The journey of the old CAAS concludes today. But the vision, courage and dedication of its people will continue in the two new entities – the restructured CAAS and the corporatised Changi Airport Group. When they pull together for the common goal of achieving the best for Changi and Singapore, you will take civil aviation in Singapore to ever greater heights. Thank you. |
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hp3000
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28-Jul-2009 22:51
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SIA - Cargo shows further improvement Singapore Airlines (SIA) posted a sequential rebound for its June 09 passenger load factors, hitting 75.7 versus 66.9 in May. Although YoY this was below June 08’s 79.2, this is still a strong showing in the current market environment. The load factors were also boosted by SIA’s capacity cuts to match demand – passenger capacity has been cut by 14.4% YoY, while passenger loads have fallen 18.2%. On a sequential basis, passenger loads were up by 9.1%, partly due to the school holidays – however, the sequential boost this year is higher than the usual seasonal 3-5% of previous years, which probably indicates that passenger loads are picking up off the lows of May, which were impacted by H1N1 fears. Cargo posted a load factor of 62.9, on the back of a 20.8% reduction in loads, matched by a 22.3% drop in capacity, to actually post a YoY improvement of 1.3 ppts. Thisreinforces the trend that the business may have bottomed out, with a consecutive improvement of 1.7 ppts in load factors.  These latest numbers reinforces our belief that the worse of the H1N1 flu scare may be over, as air travel returns to non-crisis conditions. While we reiterate that this may not entirely indicate that SIA is out of the woods, and that the situation remains very fluid, we believe that the signs are encouraging. We are leaving our full year load factor and yield assumptions unchanged, and maintaining our FY10 earnings forecasts at S$865m. We also maintain our Buy call on SIA, with a target price of S$14.70, based on 1.2x book value. Despite weak business conditions, SIA is well equipped to weather the downturn, and investors continue to recognise the quality of this blue chip investment. Potential longer-term value in SATS: Stock is effectively trading cum dividend of S$1.77/share. Buying SIA now entitles shareholders to 0.73 SATS share for every 1 SIA share. Although shareholders may not necessarily realize the value of SATS near term due to potential share overhang as free float would rise from 19% to 45%. However, applying mid-cycle airport valuations on SATS of c.18x P/E would imply a potential fair value of c.S$2.40/share longer term. Long-term prospects: SIA is one of the best-managed airlines with strong pricing power and a highly efficient cost structure in our view. It is also the only Asian airline with a net cash balance and has been returning more capital to shareholders in recent years. However, we believe SIA is a mature airline with more limited growth prospects than Cathay and its market share at its home base should gradually diminish as low cost carrier penetration grows. We see risks entering M&A deals that may not be value-enhancing. Hurry up dividen SGD 0.20 Final One-Tier-Tax + 0.73 SATS share for every 1 SIA share. XD on 13 aug 09 When last few days of XD share will be going high 
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ongkk96
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24-Jul-2009 17:30
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so time to buy..
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Blastoff
Elite |
24-Jul-2009 13:40
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Anybody know why SIA has been dropping this few days despite the market being bullish? | ||||||||
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el7888
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12-Jul-2009 17:23
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Friday, July 10, 2009 |
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BenziT
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24-Jun-2009 16:56
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up 50 cents in one day ? |
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infoshare
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13-Apr-2009 00:07
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SIA flights to Bangkok are still as usual ? number of visitors to Bangkok increasing ? |
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infoshare
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11-Apr-2009 21:50
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Time will tell whether SIA treasury can afford to continue buying back shares or should they use if other better ways ? Would not it be better for shareholders value if they : * do shares cancellation , return money to shareholders ? * preserve cash reserves and prepare for potential acqusition * divest non profitable investment that has poor outlook for the next 3 yrs.. like.. V. A. * spend more effort to beef up their expertise to do better hedging of jet fuel to minimize losses instead of spending time in buying back shares? • https://research.cimbinvest.com/research/articles/sg/SIN-LongShortView%20new-180309.pdf |
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knightbridge
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26-Mar-2009 17:53
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I know but as long as got substantial % of shareholding can influence the people inside... Both parties even as competitor will have common goal, how to make more money from passenger and cargo.. right... If not why want to share flight code...
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chinton86
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26-Mar-2009 14:36
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For your info, in aviation business, it's not like you want top take over an airline, just take over by bidding it. The country's airline tat you wanna take over must have a relationship or a pact with your country. | ||||||||
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knightbridge
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25-Mar-2009 19:29
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Keep hearing and reading bad news about airline.. But SIA stock seem to be holding up well... Will the retiring old staff and no pay leave and parking plane will increase the net profit for this year... Hmnn unlikely... Long term good... at least the competitors are dying from bankruptcy... Fewer competition in the future.. SIA will be hoping for more competitors to go under and can buy them all up cheap... Monopolise the flight route.. then consumer will have fewer choice for filight then can hike price later... |
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AK_Francis
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25-Mar-2009 00:38
Yells: "Happy go lucky, cheers." |
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Got aircraft, but lack of passengers, not a good sign as well. Since, it has canl many routes earlier on. |
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