SIA Engg

SIA Engg: 1QFYMar13 results in line. Net profit came in at $70.1m, +2.9% yoy, on revenue of $300.5m, +8.2% yoy. Maybank Kim Eng notes concerns of margin erosion and a delayed recovery in the aviation sector remain as risk factors, evidenced by higher subcontract, staff and material costs being main contributors to the 9.6% yoy rise in operating expenses in this qtr. Nevertheless, the house maintains its Hold rating with TP $4.00, pegged to the historical P/E avg of 15.4x FY13e earnings. Notes the MRO segment remains relatively resilient, amidst continue growth in aircraft movement at Changi Airport; highlights sustainability in the stock’s 5-6% dividend yields.