Broker Name: CGS International Securities
Date of Report: November 14, 2025
Excerpt from CGS International Securities report.
Report Summary
- Singapore Airlines (SIA) reported a significant drop in 1HFY26 core net profit, largely due to its share of widening losses at Air India, following a 25.1% stake acquisition.
- SIA’s own operations were resilient, with stable EBIT and only a slight decline in passenger yields, despite external shocks such as the Air India 787 crash and India-Pakistan war affecting Air India’s performance and costs.
- SIA announced an interim dividend plus a “special” dividend, but the total payout is lower than last year, and future special dividends are subject to heavy planned capex and potential cash calls from Air India.
- The broker reiterated a “Reduce” rating with a lowered target price of S\$5.60, citing concerns over persistent Air India losses, possible EPS downgrades, and potential financial support requirements for Air India.
- Key financial forecasts for FY26-28 were revised downwards, with SIA’s expected net profits and dividend payouts decreasing over the next few years due to Air India’s losses and increased capex.
- Despite operational strengths, SIA faces sector headwinds and the risk of further financial strain from its Air India investment, limiting upside for shareholders.
- The report also covers SIA’s ESG initiatives, highlighting its net zero carbon emissions target by 2050, increased use of sustainable aviation fuel, and ongoing efforts in carbon offset and waste reduction.
- Financial tables and sector comparisons are included, showing SIA’s valuation metrics and performance relative to regional and global airline peers.
Above is an excerpt from a report by CGS International Securities. Clients of CGS International Securities can be the first to access the full report from the CGS International Securities website: https://www.cgs-cimb.com
