Kim Eng Research in a July 29 research report says: "SIA posted dismal 1QFY Mar12 net earnings of just $44.7 million, down 82% from a year ago. Earnings were decimated by higher fuel costs, which increased by over $300 million alone versus the previous year.
"This is also despite the fact that revenues remained strong, up 3% y-o-y to $3.6 billion. We slash our forecasts by 45% for FY Mar12 to $798.0 million and by 18% for FY Mar13 to $1,100.7 million. This reduction is solely due to the higher fuel cost assumption and partially offset by higher yield assumptions.
"Target price of $14.40, based on a P/B of 1.2x. While earnings in the short term are at risk, SIA's balance sheet will enable it to weather the storm, as it has several times before. MAINTAIN HOLD."
"This is also despite the fact that revenues remained strong, up 3% y-o-y to $3.6 billion. We slash our forecasts by 45% for FY Mar12 to $798.0 million and by 18% for FY Mar13 to $1,100.7 million. This reduction is solely due to the higher fuel cost assumption and partially offset by higher yield assumptions.
"Target price of $14.40, based on a P/B of 1.2x. While earnings in the short term are at risk, SIA's balance sheet will enable it to weather the storm, as it has several times before. MAINTAIN HOLD."
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