Preferred Proxy To Ride Singapore Aviation Recovery
An immediate beneficiary of airlines’ increasing flight activities at Changi Airport,
SIAEC is likely the first to regain core profitability under our Singapore aviation
coverage. We see a good chance for its dividend to rebound to a meaningful level in as
early as FY23, backed by its strong net cash (about 26% of market cap). There is also
hope for a special dividend payout by FY24, given its parent SIA’s cash needs for MCB
redemption. Re-initiate coverage with BUY and FY23 DCF-based target price of S$2.80.