Broker: CGS International | Date of Report: July 23, 2026
Excerpt from CGS International report.
Report Summary
Stock Focus: SIA Engineering (SIE SP)
Actionable Call: Add (Buy)
Target Price: S\$3.80 (Up/downside: +16.2%)
- Key Idea: SIA Engineering’s 1QFY27 net profit was below expectations due to increased expansion costs at SAESL, but the broker maintains its forecasts and reiterates an Add (Buy) call.
- Growth Drivers: The analyst expects other structural growth drivers to contribute more strongly in future quarters, including narrowing gestation losses from new JVs in Cambodia and Malaysia, and potential expansion into India with Air India for widebody MRO services.
- Expansion Initiatives: SIE is actively investing in new facilities, notably SAESL’s S\$180m expansion, a new CFM LEAP engine shop JV with Safran, and operations at Subang, Malaysia, and Cambodia.
- Risks: Short-term downside risks include further expansion costs and elevated diesel prices that cannot be passed through to customers.
- Financials: FY27F net profit forecast is S\$168.9m, EPS S\$0.15, dividend yield 3.36%. SIE is trading at 21.66x FY27F P/E and offers a 16.2% upside to target price.
- ESG Highlights: SIE aims to halve Scope 1 and Scope 2 emissions by 2030 (vs FY20 baseline) and has already exceeded its 2030 recycling rate target.
Implications: Investors seeking exposure to the Asia-Pacific aviation maintenance sector should focus on SIA Engineering (SIE SP), given its structural growth plans, strategic expansions, and potential for medium-term re-rating. The Add (Buy) call is supported by a 25x FY27F target P/E, with clear actionable catalysts including new JVs and market expansion.
Above is an excerpt from a report by CGS International. Clients of CGS International can access the full research report from the broker’s website.
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