SIA

SIA: UOBK prefers Cathay (Buy, TP HK$18.70) to SIA (Hold, TP $10.50). The house remains Neutral on SIA, pending better operating statistics and would be buyers only on weakness closer to $9.80-$10. Notes traffic growth towards Europe will remain challenging due to Middle Eastern carriers. On the other hand, Cathay’s passenger traffic is growing 4x faster than SIA, and load factors are also substantially better. More importantly, Cathay shows clear signs of improvement in cargo traffic and the market has not yet factored in these improvements as the stock trades at just 0.9x FY14 book.