SIA

SIA maintained its strong load factor numbers into July 2010, with particular strength on the cargo side. Overall load factors came in at 70.8%, while passenger load factors remained in the low 80s at 82.4%, while cargo hovered at 64%. Driven by a general improvement in the economic environment, cargo traffic rose 8.2% in July, which was partially matched by the additional deployment of capacity by 7.6%.

Meanwhile, passenger traffic was up 3.6% to 7,502m passenger-kilometres, the highest monthly number since Oct 2008, excluding the December peak holiday seasons. Most of the strength continued to come from East Asia and the Americas, with load factors up by 4.6pts and 5.6pts respectively. We expect SIA to accelerate its profitability over the remaining quarters through higher loads and yields, and also see a boost from seasonal factors. KE maintain BUY rating with TP of $18.90.