Broker Name: OCBC Investment Research
Date of Report: 6 November 2025
Excerpt from OCBC Investment Research report.
- SIA Engineering Company (SIAEC) delivered strong 1HFY26 results with revenue and PATMI growing by 26.5% and 21.1% year-on-year, respectively, driven by robust MRO demand and new service agreements with Singapore Airlines.
- OCBC maintains a HOLD rating on SIAEC with a revised fair value estimate of SGD3.68, citing current valuations, ongoing gestation costs for capacity expansion, and tariff uncertainty despite the positive industry outlook and company initiatives in capability development and diversification.
Report Summary:
- SIAEC’s revenue and profit growth reflects recovery and strong demand in the aviation MRO sector.
- The company is expanding capacity, growing partnerships, and entering new markets, but faces near-term risks from costs and reliance on Singapore Airlines.
- Interim dividend increased to 2.5 Singapore cents per share, with positive ESG improvements noted, especially in corporate governance and safety.
- Valuations are not compelling for a BUY; HOLD rating is maintained with a fair value of SGD3.68.
- Main risks include labour shortages, inflation, and high dependence on its parent company for business.
Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Investment Research can be the first to access the full report from the OCBC Investment Research website: https://www.ocbc.com/personal-banking/investments/research-insights
