SIA

SIA: UOB Kay Hian maintains Hold with TP $11.30. The house expect 3QFY14 ex-EI net profit to fall 47% yoy to $86m. Weak pax yields along with steep losses from 40%-owned Tigerair should lead to an estimated 47% yoy decline in 3QFY14 earnings. SIA is also likely to report Exceptional Items (EI) losses of S$80.9m for the period, due to cargo price fixing settlements. Operationally, there is very little going in SIA’s favour. 4QFY14 is likely to be weaker due to capacity cuts in Thailand. Aside from weak loads, a key focus would be Scoot’s profitability. While SIA does not report Scoot’s numbers, it can be inferred from group operating profit. A qoq improvement will be viewed positively, but not sufficient to re-rate the group.