SIA Engineering - CGS-CIMB Research 2021-07-23: Associates Leading The Recovery

SIA ENGINEERING CO LTD (SGX:S59) | SGinvestors.io SIA ENGINEERING CO LTD (SGX:S59)

SIA Engineering - Associates Leading The Recovery

  • In its 1QFY3/22 business update, SIA Engineering surprised positively with a S$14.5m net profit (+88% q-o-q, +36% y-o-y), forming 46% of our FY22F forecast.
  • We believe this was lifted by stronger profit from associates and JVs (+20% q-o-q, +8% y-o-y) and some tax credit (amount undisclosed). JSS: S$38.6m.
  • SIA Engineering trades at -1.5 standard deviation of its historical mean, and we believe this could be time to add for long-term with eventual recovery as catalyst. Maintain ADD, Target price: S$2.85.



Steady revenue, wider operating losses, stronger associates/JVs

  • Based on its succinct disclosure, SIA Engineering (SGX:S59)’s 1QFY3/22 revenue of $125.3m (+9% q-o-q, +6% y-o-y) was driven by higher flight activities, with group opex at S$128m (-7% q-o-q, +13% y-o-y) and an operating loss of $2.9m (vs. operating loss of S$1.1m in 4QFY21).
  • Share of profits of associates and JVs was $14.8m, forming 39% of our FY22F forecast. Key contribution was from the engine and component segment ($18.3m), while the airframe and line maintenance segment turned in a lower loss of $3.5m.
  • Without the Job Support Scheme (JSS), SIA Engineering would have incurred a 1QFY22 net loss of S$24.1m.
  • We believe SIA Engineering's 1QFY22 net profit of S$14.5m could have also been lifted by a tax credit of an undisclosed amount.


Strong cash balance, add for eventual recovery






LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2021-07-23
SGX Stock Analyst Report ADD MAINTAIN ADD 2.850 SAME 2.850



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