Aerospace

Singapore Airlines can unlock value by merging SIA Engineering w/ ST Aerospace to form MRO Powerhouse

Global – Singapore Airlines can unlock value significantly via a partial or complete divestment of SIA Engineering that would yield Singapore Airlines’ shareholders a dividend in specie of S$0.81 to S$2.34 per SIA share. While highly speculative at this juncture, we believe that a merger between SIA Engineering and ST Engineering (STE:SP)’s Aerospace division (ST Aerospace) will be highly beneficial to all parties …

Read More

SIA Engineering (SIE:SP) share price drop triggered by block trade, not fundamentals

Singapore – SIA Engineering (SIE:SP)’s share price fell 5% to S$3.28 this morning. We believe this was mainly driven by a substantial block trade amounting to a 3.5% stake in SIA Engineering and not fundamentals. Singapore Airlines Limited just announced that it has not sold any SIA Engineering shares. These shares were from an institutional investor. The MRO sector outlook is still challenging near term but it is not getting materially worse. We remain bullish on SIA Engineering’s longer term prospects. 

Read More

Air France AF66 engine explosion to drive checks on A380s powered by GP7200 engines

Global – Air France AF66’s uncontained engine explosion will drive engine checks on Airbus A380s powered by the GP7200 engines. This is negative for manufacturer Engine Alliance, a JV between General Electric and Pratt & Whitney. Detailed GP7200 engine checks will be especially disruptive for Emirates which operates by far the the world’s largest A380 fleet. As many as 90 Emirates A380s are powered by the GP7200 engines. The GP7200-powered Airbus A380s account for 35% of Emirates’ total aircraft fleet and 45% of Emirates’ total seat capacity …

Read More

Record year for global air cargo market to benefit Asian airlines and MRO players

Global – We expect the global air cargo market to remain strong. Asia Pacific carriers w/ the largest cargo exposure are China Airlines, Korean Air, Cathay Pacific and EVA Airways. Supply growth will be a moderate 3-4% in the next 5 years. The stronger market, coupled w/ low fuel prices, may revive passenger-to-freighter conversions which will benefit MRO players ST Engineering, SIA Engineering and HAECO.

Read More

ST Engineering (STE:SP) 2Q17 weakened by Marine but Orderbook hits all-time high

Singapore – ST Engineering’s 2Q17 headline results were weaker than expected, hurt by additional provisions made by the Marine segment. This has led management to revise down its earnings guidance, expecting Group pre-tax profits to be comparable to 2016. On a more positive note, the Group orderbook hit a record high of S$13.5B which will support longer term growth …..

Read More

SIA Engineering (SIE:SP) 1QFY18 results slightly weaker, recent milestones will drive future growth

SIA Engineering’s 5% y/y decline in recurring profit in 1QFY18 was slightly below our forecast. The key disappointment SAESL while ESA was the bright spot. Margin pressure remains for SIA Engineering’s core business. Although the MRO sector outlook is challenging near term, we remain bullish on SIA Engineering’s longer term prospects. Several game-changing business developments achieved during 1QFY18 will significantly enhance its competitive advantage and provide new long-term earnings growth drivers.

Read More