SIA Engineering

SIA Engineering: Our house maintains Buy; ups target to $5.00 from $4.52, after raising FY11 forecast by 8%, and valuation to 20x PE from 18x PE. 1Q FYMar11 results were above expectations. Sales growth +18% yoy to $288m, led by the maintenance & component overhaul business and fleet management by airlines following the recent rebound in the aviation sectors. Contributions from associates & JVs, a laggard part of SIE’s business, have also begun to catch up, rising 10% YoY, resulting in net profit + 57% YoY to $70.8m. Mgt sanguine on outlook, expects recovery of aviation industry, growth in traffic at Changi and increased utilization of aircraft by customers to further boost its MRO business.