SIA

SIA: 3Q13 results misted estimates. Rev at $3.86b, flat yoy, while net profit at $143m, +5% yoy. Result brings 9M13 rev to 11.4b, +3% yoy and net profit to $310m, -17% yoy. SIA's operating profit -17% yoy to $131m in the qtr, as the cargo unit posted an operating loss of $29m due to depressed yields and poorer loads. Grp also add that outlook for international air travel demand continues to be challenging and the cargo mkt remains depressed amid the troubled EU economy and the weak recovery in the US. Loads and yields for both its passenger and cargo businesses are expected to remain under pressure with the price of jet fuel near its historical high. Grp also add that is has seen increased competition from aggressive Middle Eastern carriers such as Emirates and Qatar Airways grabbing more market share on long-haul routes as they polish their service while keeping prices low. Also facing challenges from low-cost rivals including the ambitious AirAsia group. Grp trades at 0.97x P/B. Ratings as follow: JP Morgan O/w with $13.00 TP Nomura maintains Buy with $12.20 TP CS maintains Neutral with $11.70 TP CIMB maintains Neutral with $11.00 TP Citi maintains Conviction Sell with $9.40 TP UOB Kay Hian maintains Sell with $10.70 TP