SIA

SIA: Sector aircraft deliveries are moderating and improving industry supply/demand balance should alleviate fare pressure, while rising premium traffic (45% of revenue) should lift yields. JPM forecasts a pick up in US/EU travel (42% of passenger revenue), and a turnaround in SIA Cargo (14% of revenue). Jet fuel is also down 6% y/y. Valuations have fallen to 0.8x P/B, historical trough valuations and a 19% discount to Cathay Pacific (vs. a 9% discount historically). Net cash is 35% of market cap, JPM expects SIA’s “liquidation value” at $13.30 per share. JPM maintains O/W on SIA, with TP $13.00