- On 11 Sep 2023, RTX Corp (RTX US) announced that it intends to recall and inspect ~3k of its Pratt & Whitney (P&W) PW1100G geared turbofan (GTF) engines over 2023-26F due to manufacturing flaws.
- P&W’s GTF engines are mostly used in Airbus’s A320neo-family jets. With ~3k engines being recalled and inspected, this would account to ~94% of the GTF engines currently in use globally, according to RTX. RTX estimates that ~350 aircraft will be grounded for inspections p.a. over the three years, with inspections in 2024 being more front-loaded.
SIAEC's associate ESA could stand to gain from increased work volumes
- - Read this at SGinvestors.io -
- - Read this at SGinvestors.io -
- Assuming SIA Engineering mostly services engines from ASEAN airlines (as there are GTF workshops operating in China), we estimate SIA Engineering’s share of the pie at ~150 engines (spread over 2023-26F). Based on our preliminary estimates, we believe ESA’s higher revenue growth could add ~S$5m to SIA Engineering’s 2HFY24F net profit, before rising to ~S$10m in FY25F.
Maintain HOLD for now; valuations look fair at 21x CY24F P/E
- 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/.
Kenneth TAN CGS-CIMB Research | LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2023-09-14
Read also CGS-CIMB's most recent report:
2024-02-15 SIA Engineering - Topline Strength Dragged By Forex Losses.
Previous report by CGS-CIMB:
2024-02-12 SIA Engineering - Risk-Reward Turning More Attractive.
Price targets by other brokers at SIA Engineering Target Prices.
Listing of research reports at SIA Engineering Analyst Reports.
Relevant links:
SIA Engineering Share Price History,
SIA Engineering Announcements,
SIA Engineering Dividends & Corporate Actions,
SIA Engineering News Articles
