Singapore Airlines (SIAL.SI -3L -S$15.54): Market Cap S$M 18,508.06 - Robert P Kong, CFA
Target: S$16.00
Recovery continues, but largely in the price - SIA reported a robust set of operating statistics for March, suggesting a strong finish to SIA's FY Mar-10 earnings, but on track for our above consensus FY2011 forecasts. For the month passenger traffic rose +13.9%YoY, partly on base effects and a shift in timing of Easter holidays (from April to March), cargo traffic +12% YoY, both of which should support yield recovery in the coming months. However, we maintain our view that stock is already fairly valued at 1.3x FY11E P/B against our above-consensus ROE forecast of 10.3% for FY11.
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