SIA has broken below the 9.90 support level which has held in June 2013 before bouncing back up. If it does not stay above 9.90 in the coming days, more downside can be possible. Potential CFD SELL trade setup with a near term target downside from 9.50 to 9.70. Only the upside breakout of 9.90 will invalidate our bearish scenario, in this case a recovery should shape towards 10.10 to 10.30.
OCBC – 26 JULY 2013
Singapore Airlines: No re-rating yet
Excluding one-off items, Singapore Airlines’s (SIA) 1Q14 results came in below expectations. Revenue would have fallen slightly while PATMI was inflated by exceptional items and aircraft/parts disposal gains. ). SIA remains plagued by intense competition within the premium carrier space and passenger yields continue to stay depressed. With the outlook for FY14 still expected to remain lacklustre, we anticipate an extension of selling pressure on the counter for the interim. Based on a peg of 0.8x P/Book, we maintain SELL on SIA with a fair value estimate of S$9.50 (S$10.00 previously).
Excluding one-off items, Singapore Airlines’s (SIA) 1Q14 results came in below expectations. Revenue would have fallen slightly while PATMI was inflated by exceptional items and aircraft/parts disposal gains. ). SIA remains plagued by intense competition within the premium carrier space and passenger yields continue to stay depressed. With the outlook for FY14 still expected to remain lacklustre, we anticipate an extension of selling pressure on the counter for the interim. Based on a peg of 0.8x P/Book, we maintain SELL on SIA with a fair value estimate of S$9.50 (S$10.00 previously).
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