- SIA's share price is currently trading at FY26e P/B of 1.3x, which we view as overvalued. We cut our FY26e PATMI forecast by 30% to account for the more severe-than-expected loss from associates, while maintaining our REDUCE call with a lower SIA's target price of S$5.94 (previously S$6.08), based on 1.1x FY25e P/B.
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- SIA's 1QFY26 PATMI (ex-associates)/with associates declined by 31.9% y-o-y / 58.8% y-o-y to S$308mil / S$186mil, underperforming our expectations and forming 12% / 21% of full-year estimates. The decline was mainly due to lower interest income (-S$61mil) and a S$122mil share of losses from associated companies (Air India).
- - Read this at SGinvestors.io -
- While passenger and cargo yields remain under pressure amid ongoing geopolitical tensions and rising costs, demand for air travel remains resilient.
The Positives
Record passenger carriage.
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