Date of Report

October 1, 2024

Broker Name

UOB Kay Hian

Company Overview

Singapore Airlines (SIA) is a major international airline based in Singapore. Renowned for its premium service and operational excellence, SIA provides passenger and cargo transport services to numerous destinations worldwide. The airline has a strong reputation for quality and customer satisfaction.

Recent Developments

The report highlights that the Chinese government has recently implemented significant stimulus measures aimed at revitalizing its economy. These initiatives are expected to boost consumer confidence and increase travel demand, which could positively impact airlines, including Singapore Airlines.

Revenue Exposure to China

SIA has substantial revenue exposure to the Chinese market, particularly in passenger traffic and cargo services. With the anticipated recovery in travel demand following the government’s economic initiatives, SIA stands to benefit from increased passenger numbers and cargo volumes.

Investment Recommendation

• Recommendation: SELL
• Current Price (S$): 6.80
• Target Price (S$): 5.83
• Potential Upside (%): (14.3%)

Market Context

While there are expectations for a rebound in travel, the airline industry remains sensitive to geopolitical issues and competition. The government’s stimulus measures may provide a temporary boost, but SIA must navigate a complex market landscape to sustain its recovery and profitability.

Conclusion

Singapore Airlines is well-positioned to benefit from the anticipated increase in travel demand due to the economic stimulus measures. However, the potential for ongoing challenges in the airline industry suggests caution for investors.