Singapore Airlines - CGS-CIMB Research 2022-01-27: Robust VTL & Cargo Demand To Benefit 3Q

Singapore Airlines - Robust VTL & Cargo Demand To Benefit 3Q

  • Passenger airline business recovered strongly in November and December 2021.
  • We estimate that SIA (SGX:C6L) will deliver a reported net loss of ~S$300m in 3QFY22F (Oct-Dec 2021), narrower than the S$409m loss in 1QFY22 and S$428m loss in 2QFY22, when the quarterly update is released on 24 Feb.
  • The outlook for 4QFY22F is less robust, as the VTL quota was halved from 21 Jan 2022 onwards due to the Omicron outbreak. Also, spot jet fuel prices have rallied to US$98/bbl, against our FY23F assumption of US$82/bbl, and SIA hedged only 40% of its fuel needs for 15 months from 1QFY23F to 1QFY24F.
  • Reiterate ADD call on SIA.
  • We maintain our end-CY22F target price for SIA at S$5.86, still based on an unchanged target P/BV multiple of 1.06x (1 standard deviation above the mean since 2011 of 0.93x), applied to the end-FY23F adjusted BVPS.

Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @

Raymond YAP CFA CGS-CIMB Research | 2022-01-27

Read also CGS-CIMB's most recent report:
2023-01-16 Singapore Airlines (SIA) - Time To Pocket Share Price Gains.

Previous report by CGS-CIMB:
2022-12-06 Singapore Airlines - Merger Of Vistara & Air India ~ Better Than Standing Alone.

Price targets by 3 other brokers at SIA Target Prices.
Listing of research reports at SIA Analyst Reports.

Relevant links:
SIA Share Price History,
SIA Announcements,
SIA Dividends & Corporate Actions,
SIA News Articles

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