As at 9.54am, SIA shares gained 2.36% to change hands at $6.06.

For the year ended March, SIA reported earnings of $2.2 billion, beating expectations of just over $2 billion, as pent-up demand for travel helped drive recovery from the pandemic.

SIA plans to pay a final dividend of 28 cents, which will bring the full-year payout to 38 cents, equivalent to a payout ratio of 52%. DBS Group Research was expecting a full-year payout of just 25 cents.

However, the airline has guided that growth, going forward, will moderate.

"The moderation in passenger yields is in line with expectations and is not a cause for concern," states DBS in its May 18 note.

See also: <a class='gtm_see_also_1_inread' style='text-decoration: underline;' href='/capital/brokers-calls/maybank-keeps-buy-call-lhn-which-firing-all-cylinders?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>Maybank keeps 'buy' call on LHN, which is 'firing on all cylinders'</a>

"As competition intensifies with rivals ramping up their flight capacities, we expect a further contraction in yields."

"However, given current supply-demand dynamics, the return to normal levels will be a gradual process, in our view," adds DBS, which has a "buy" call and $6.80 target price.\

CGS-CIMB Research's Raymond Yap, on the other hand, has raised his target price slightly from $6.14 to $6.15, as he factors in a higher price to book multiple of 1x, versus 0.9x previously, thanks to stronger cash flow generation.

See also: <a class='gtm_see_also_2_inread' style='text-decoration: underline;' href='/capital/brokers-calls/mapletrees-group-reits-are-great-place-be--says-dbs?utm_source=website&utm_medium=article&utm_campaign=ONPAGESEO'>Mapletree’s group of REITs are a ‘great place to be in’, says DBS</a>

Yap, in his May 17 note, says that SIA’s share price may find support from the 28 cents final dividend, and that the airline's historical P/BV multiple may hit 1.05x once SIA completes the announced redemption of $3.1 billion in mandatory convertible bonds come June 2023.

"Nevertheless, we expect SIA’s strong results and the upcoming 28 cents final distribution per share or DPS to keep the share price elevated for now," says Yap.

SIA shares closed May 17 at $6.01, up 1.52% for the day.

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