Broker: DBS Group Research
Date of Report: 24 July 2026
Excerpt from DBS Group Research report.
Report Summary
- Stock: SIA Engineering Company Ltd (SIE SP)
- Action: BUY (Maintain)
- Target Price: SGD 3.80 (unchanged)
- Share Price (as of report): SGD 3.13
Key Highlights:
- 1QFY27 net profit was SGD40.3mn, slightly below expectations due to higher gestation costs at associates and JVs.
- Operating profit improved by 26.9% q/q and 158.8% y/y to SGD13.2mn, with operating margin reaching 4.0%—the highest since the pandemic.
- Main drag was from investments for capacity expansion at Engine and Component associates/JVs, offset partially by higher engine shipments.
- Core business margins have shown strong recovery, as start-up costs and loss-making contributions ease.
- The SIAEC-Safran LEAP JV (SIAEC 49%) and a new MoU with Air India provide clear expansion opportunities, especially in the rapidly growing LEAP engine segment and India market.
- DBS expects the current investment drag to be temporary, with earnings inflection intact as capacity expansions mature.
- Dividend yield estimated at 3.5% with forward P/E at 18.4x.
Actionable Insight:
- Investors are advised to BUY SIA Engineering Company Ltd for medium-term earnings recovery, supported by strong margin improvement, Asia-Pacific air traffic growth, and strategic expansion initiatives. Target price is unchanged at SGD 3.80.
Above is an excerpt from a report by DBS Group Research. Clients of DBS Group Research can access the full research report from the broker’s website.
