UOB Kay Hian analyst K Ajith has downgraded Singapore Airlines (SIA) to “sell” with a lower target price of $4.40 from $4.43 previously.

“We had previously valued SIA at 1.0 times and FY2022 and FY2023’s book value to derive a target price of $4.43. We now raise our fair value price-to-book (P/B) assumption to 1.1 times FY2022 and FY2023 average and derive a target price of S$4.40,” he writes in a report dated April 14.

“Excluding [the] $6.2 billion in mandatory convertible bonds (MCB) which is recognised as equity, SIA is trading at about 1.6 times FY2022’s book value or about 70% premium to pre-Covid-19 levels… [which] is anything but cheap,” he adds.

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