SIA: MS thinks investors should accumulate on weakness, and has a longer term turnaround story. In recent results, SIA did not benefit from lower fuel prices, as 65% of jet fuel needs were hedged at US$116/barrel. MS says it is now 19% hedged at US$114/bbl for jet fuel, and 18% hedged at US$98 Brent crude/ bbl, at a time where most ASEAN airlines are reaching 50% fuel hedge. Assuming fuel prices stay lower for longer, SIA will likely enjoy fuel savings going into FY16.
The house maintains Overweight on SIA with TP of $16.43
No comments:
Post a Comment