Singapore Airlines BUY S$ 11.40
1) 3QFYMar14 operating profit grew 15% y-o-y to S$151m, but associate losses from Tigerair and exceptional items pulled net profit down by 65% y-o-y to S$50m
2) Core passenger business posted a 49% y-o-y increase in EBIT to S$130m but other segments’ results were weaker
3) Balance sheet firm with over S$4bn in net cash and investments
4) Maintain BUY and S$11.40 TP (1x FY14 P/BV)
SIA Engineering HOLD S$ 4.80 (Prev S$ 5.10)
1) 3Q FY14 net profit down 10% y-o-y, misses estimates
2) Rising labour costs a drag on core operating profits, mitigated partly by higher JV/ assoc contributions
3) Cut FY14/15 earnings estimates by 4-5%
4) Dividend potential is key silver lining; maintain HOLD rating with lower TP of S$4.80
Mermaid Maritime BUY (Initiating coverage) S$ 0.60
1) Robust prospects for Mermaid’s subsea services and niche tender rig business
2) New customers like Saudi Aramco and new markets like the North Sea inspire confidence
3) Strong earnings delivery in coming quarters, ROE rebound should lead to further re-rating 4) Resume coverage with BUY and TP of S$0.60
Wing Tai BUY S$ 2.22 (Prev S$ 2.50)
1) Weaker y-o-y results on slower residential and associate contributions
2) Timing new launches in Singapore, more visible overseas contribution in the medium term
3) Maintain BUY on valuation grounds and longer term prospects; nudged down TP to S$2.22
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