SIA Engineering target price cut by OCBC

OCBC Investment Research has cut its target price for SIA Engineering Co (SIAE.SI), a unit of Singapore Airlines (SIAL.SI), to $3.88 from S$4.21 and kept its hold rating.

OCBC has lowered its fiscal 2012 revenue forecast for SIA Engineering by 8.5% and net profit by 4.5%, as it expects its newly set-up joint ventures with Safran and Panasonic Avionics Corp to hurt its earnings in the short-term.

“Revenue and net profit contribution could fall initially but the potential growth, as these joint ventures mature, will more than offset the short-term pain,” OCBC said in a report.