SIA

SIA: SIA conducted an informal analyst briefing following the recent release of its 1QFY14 numbers. Conversation centred on three areas: SQ's yield composition, the outlook for the freight business and specific market performance, in particular, Australia. While SIA tends to be economical with guidance, it would appear that the greatest contributions to passenger yield (and its 1QFY14 decline was currency—especially JPY and AUD, with the mix actually quite stable. While discounting to fill additional seats to Australia remains a reality, CS see the impact of better business class load and a less aggressive YoY currency track taking some pressure off yields in future periods. CS retain its OUTPERFORM rating and $12.50 TP. House view is that airlines continue their gradual firming in both earnings and stock price, absent any sharp movement in jet fuel and/or currency.