SIA

SIA: Operating results for Apr 2011. Capacity grew 11.2%yoy and carriage grew 7.0%yoy, but highlight that prev yr same period was affected by Iceland ash clouds in Europe. This resulted in load declining 3.0% pts to 74.6%...

Total passengers increased by 6.3% to 1.4m. A new service to Sao Paulo via Barcelona was launched and capacity was increased to Guangzhou, HK, Male and Taipei. All regions except to South West Pacific saw decline in load due to capacity increases and adverse events in Middle East and Japan…

On cargo, capacity increased by 10.3% and cargo traffic improved by 11.8% resulting in cargo load being up 0.9% points. Increased loads on freighter flights and seasonable perishables were the cause of improvement. Growth came from East Asia, West Asia and Africa region. SIA has fwd P/E of 14.3x and appears to be recovering after bottoming out in early Mar, peer Cathay Pac trades at fwd P/E of 8.2x. CIMB maintains Outperform with TP$16.00…

In a recent IATA report, premium travel growth has slowed +2.9% in Mar down from +7.8% in Feb due to Japan and Middle East but believes pace of premium travel to pick up in 2H2011 due to positive global trade indicators.