SINGAPORE (Nov 27): The announced divestment of SIA Engineering’s 10% stake in Hong Kong Aero Engine Services will provide a one-off net gain of $149 million and $38 million dividend income, but is negative in the long term and helps justify a sell rating on the company, UOB Kay Hian says in a note.

The brokerage argues that the restructuring of joint ventures resulting from the divestment would “lead to increased competition with the removal of territory-based rights.”

It raises its 2016 fiscal year net profit forecast to $338 million from $165 million, but lowers its net profit forecast for 2017 by 3%.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Related Stories

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook