Wednesday, November 24, 2010


SIA: UBS maintains Buy and raises TP to $19.50 from $16.50 based on 1.57x P/BV. Note that share price has underperformed Asian peers, +7% Ytd vs +11%, +60% in MSCI AXJ Index, Cathay Pacific's share price, respectively. Highlight that stock trading at 10x FY12E EPS, 4x EV/EBITDA, 1.2x FY12E book value, discount to mid-cycle, peer valuations, and 5% dividend yield….

Tips SIA slower recovery attributed to its modest capacity growth and fleet reconfiguration, smaller exposure to north Asia, and competition from low cost and Gulf carriers. However, note that grp’s business model remains solid and estimate 28%YoY growth in pre-ex EPS in FY12.

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