SINGAPORE (Dec 18): Daiwa is keeping SIA Engineering (SIAEC) at “outperform” with a lower target price of $3.56 compared to $4.10 previously, in line with lower earnings forecasts over the next three years as well as tapering FY21-28 earnings growth rate for the group’s line maintenance division.
In a report last Friday, analyst Royston Tan notes that operating margins have likely bottomed for the group after it saw some positives in 2Q18 results on an adjusted basis.
In his view, earnings from SIAEC’s repair and overhaul division – which remained loss-making over the latest quarter due to poor performance by its fleet management business – are now likely to achieve breakeven only in FY20 versus Daiwa’s earlier expectation of FY19.
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