Singapore Airlines (SIA) - CGS-CIMB Research 2023-05-18: Positive Tweaks To Earnings Estimates

Singapore Airlines (SIA) - Positive Tweaks To Earnings Estimates

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SIA (SGX:C6L) | SGinvestors.ioSIA (SGX:C6L)
  • In SIA's announcement on FY23 earnings, SIA guided that its group passenger ASK capacity for 1HFY24F (Apr to Sep 2023) will likely average 83% of the Jan 2020 level, which is equivalent to 87% of the Apr to Sep 2019 level. Furthermore, during its analyst and media briefing, SIA said its ASK capacity will likely reach some 90% of the Jan 2020 level by end-Mar 2024, which implies that its 2HFY24F ASK capacity will be equivalent to 94% of the sum total of its Jan to Mar 2019 and Oct to Dec 2019 ASK capacities, in our estimate.
  • - Read this at SGinvestors.io -
  • - Read this at SGinvestors.io -
    • In SIA's announcement on FY23 earnings, SIA guided that its group passenger ASK capacity for 1HFY24F (Apr to Sep 2023) will likely average 83% of the Jan 2020 level, which is equivalent to 87% of the Apr to Sep 2019 level. Furthermore, during its analyst and media briefing, SIA said its ASK capacity will likely reach some 90% of the Jan 2020 level by end-Mar 2024, which implies that its 2HFY24F ASK capacity will be equivalent to 94% of the sum total of its Jan to Mar 2019 and Oct to Dec 2019 ASK capacities, in our estimate.
    • Taking SIA’s guidance in totality, we think SIA’s FY24F ASK capacity will likely be 90% of its CY19 level, instead of the 92.4% that we had earlier estimated; this new estimate is now baked into our model. In the same vein, we reduce our estimate of SIA’s FY25F ASK capacity from 99.2% to 94.4% of the CY19 level, and lower our FY26F ASK estimate from 102.8% to 100.4%. The slower pace of capacity restoration takes into account delays in the delivery of SIA’s 787 aircraft orders from Boeing. We keep our PLF assumptions unchanged, hence the lower ASK estimates also flow through to lower RPK estimates.
    • Despite lower ASK and RPK estimates, we still raise our FY24-26F core net profit forecasts for SIA by 3-6% as we reduce our staff cost estimates by 10% for FY24-25F and by 2% for FY26F.
      • Read more at SGinvestors.io.




      Above is the excerpt from research report by CGS-CIMB.
      Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.




      Raymond YAP CFA CGS-CIMB Research | https://www.cgs-cimb.com 2023-05-18



      Read also CGS-CIMB's most recent report:
      2024-01-09 Singapore Airlines - Upgrade To ADD For Big Returns Over Half Year.

      Previous report by CGS-CIMB:
      2023-11-08 Singapore Airlines - Somewhat Overcast Skies Into 2HFY24.

      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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