Thursday, May 20, 2010

SIA Engineering

SIA Engineering has secured a S$42m fleet mgmt programme (FMP) contract with Royal Brunei Airlines to provide maintenance and fleet mgmt services for its fleet of six Boeing B777-200ER aircraft, which it is leasing from S'pore Airlines (SIA). Under the FMP contract that will commence in May-10, SIE will provide Royal Brunei Airlines with a wide range of services, including fleet technical mgmt, spares support, component repair and overhaul, and heavy maintenance services in Bandar and S'pore.

Overall, the latest order win is within our assumption, hence there is no change to our forecasts. The stock is trading at 16x FY11 P/E (Mar YE) with dividend yield of about 5%. Our house’s TP for SIA Engineering is $4.21.

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