SIA Engineering (SIAEC): Divesting its stake in HAESL to record net gains of $149m and $38m in dividend income. However, this is a one-off gain and the restructuring of its JV with Rolls-Royce will lead to increased competition with the removal of territory-based rights.
SIAEC and SAESL effectively lose the exclusive status of being the sole Centre of Excellence in Asia Pacific, which is negative for SIAEC over the long term.
UOB Kay Hian maintains its Sell rating with TP of $3.30.
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