SIA

SIA: UOB Kay Hian downgrades to Hold with $11.50 TP. House note that Ytd pax and cargo traffic growth of 1% and -4.8% were weaker than expectations and SIA had also warned on yields. House also concerned by SIA’s recent aircraft orders as it will take capital commitments towards $40b-45b. Consequently, lower FY14 net profit forecast by 34% and downgrade SIA to a HOLD. Add that according to Amadeus, Air Traffic Trend Intelligence Solution, 15% of all pax traffic between Asia Pacific and Europe transit at Dubai, Doha and Abu Dhabi. Traffic on the transit routes are growing at a faster pace than the main route, which highlights the significant competition that SIA faces.