- Lift SIA Engineering's FY26/27F net profit estimates on improved pricing with SIA, maintain BUY with higher SIA Engineering's target price of S$3.50.
We estimate that SIAEC’s renewed contract with SIA brings a high single-digit rate uplift.
- - Read this at SGinvestors.io -
- - Read this at SGinvestors.io -
SIA’s upcoming A350 cabin retrofit programme.
- Based on our estimates, the S$1.1bn A350 cabin retrofit contract should contribute around S$100mil annually, assuming 40% of the contract value relates to technical labour and installation.
- Prior to the renewal, the annual run-rate for all contracts (SIA, Scoot, SilkAir, and SIA Cargo) was about S$492mil. Excluding the retrofit contribution, the new run-rate stands at roughly S$552mil, representing a 12.3% increase.
- After adjusting for SIA Group’s fleet expansion from 195 aircraft in Mar 23 to 205 in Mar 25 (and noting the shift towards a greater share of newer-generation aircraft), we estimate the contract brings a high single-digit uplift in MRO rates charged to the group, which is better than our previous expectation of a mid-single-digit increase.
Maintain BUY with a higher target price of S$3.50.
- Read more at SGinvestors.io.
