Broker: OCBC Group Research
Date of Report: 24 July 2026
Excerpt from OCBC Group Research report.
Report Summary
Stock: SIA Engineering Co Ltd (SIE SP EQUITY)
Action: BUY
Target Price (Fair Value): SGD 3.85
Last Close: SGD 3.27
Key Ideas & Highlights
- BUY rating maintained despite a weak 1QFY27, as long-term fundamentals remain intact. The target price (fair value) is set at SGD 3.85 after a slight reduction from SGD 4.00 due to lower-than-expected earnings.
- Actionable Insight: Investors are advised to accumulate given the attractive upside to fair value and robust long-term demand for maintenance, repair, and overhaul (MRO) services, especially with SIAEC’s capacity expansion and strategic partnerships in high-growth markets like India.
- Investment Rationale: SIAEC is a global leader in MRO, serving over 80 international airlines. Despite short-term headwinds such as higher start-up costs and supply chain challenges, the company’s investments in engine maintenance and new JVs position it well for future growth.
- Recent Developments:
- Signed a JV agreement with Safran for a CFM LEAP engine MRO shop in Singapore, tapping into the growing market for LEAP engines.
- Signed an MOU with Air India to explore MRO collaborations, capturing part of India’s rapidly growing aviation market.
- Financials & Outlook:
- 1QFY27 net profit fell 6.1% YoY to SGD 40.3m, tracking below expectations due to lower materials revenue and higher start-up costs.
- Underlying MRO business remains healthy, supported by increasing flight volumes and international partnerships.
- FY27-28 EPS estimates were trimmed by 4-6% to reflect the softer quarter, but the company’s long-term trajectory remains positive.
- Potential Catalysts: Faster airline fleet growth, easing of cost pressures, and higher contributions from JVs could drive further upside.
Above is an excerpt from a report by OCBC Group Research. Clients of OCBC Group Research can access the full research report from the broker’s website: OCBC Group Research research website.
