Wednesday, January 26, 2011

SIA Engineering

SIA Engineering: Reported 3Q11 results, with rev at $269.5m, +11.6%YoY and flat QoQ, in line with consensus estimates, while Net Profit at $60.3m, +7.7% YoY and flat QoQ. For 9M10, rev rose 13.8% to $834.9m and Net Profit was at $197.6m, on track to hit FY11 Net Profit consensus estimates of $267.3m...

Strong performance was mainly due to an increase in contribution from MRO work, as well as fleet management programme. Line Maintenance rev also increased as more flights were handled. Overall Net Margins remained flat YoY at 23%, attesting to grp’s continued operating efficiency. ...

Share of profits from associated and joint venture companies grew 9.5% to $110.9m, representing a contribution of 48.6% to the Group’s pre-tax profits. We note that result brings 9M11 EPS to 18.18c, +20%YoY, with a net cash position of $458.6m ($0.42). Ex cash, grp trades at 15.7x FY11E PE, vs its historical average of 15.5x, suggesting that counters appear fairly valued at current price…

Kim Eng maintains Hold position, but reduces TP to $4.50 from $4.70, while BNP Paribas similarly maintains Hold Call with $4.69 TP.

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