SIA

SIA: BNP Paribas initiate coverage with a HOLD rating and TP of $11.70. Note that although SIA is among the most liquid airline stocks in the region, find that Co. is fairly valued at this juncture and expect very limited upside.

Add that an improved economic outlook could drive business confidence up and translate into higher yield and higher traffic growth. Premium seats, which account for 40% of the airline successful and timely execution of the long-haul LCC model could strengthen market confidence toward the stock.

TP of $11.70 based on P/B of 1.0x, which is the average historical valuation recorded during the 2008-09 and the five-year mean P/B, which corresponds to a mid environment. Believe that SIA’s healthy balance sheet, huge cash pile and strong resilience to a new economic downturn support a valuation level of 1x P/BV.