SIA Engineering Company

[FFNow]

Yes, I am. In this very company, in fact.

Haha no wonder! Are u a LAE?!

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Haha no wonder! Are u a LAE?!

[Jon-san]

Haha no wonder! Are u a LAE?!

Yup!

[Musicwhiz]

A quick check shows that SIA Engineering has closed at its highest level of $3.85 since Sep 28, 2011 (when it also closed at $3.85). However, the price now is also after ex-dividend for the FY 2012 interim dividend of 6 cents/share.

With the recent business developments announced from Feb 14-16, 2012, there is a reasonable chance for SIA Engineering to be able to maintain its final dividend of 14 cents/share when it reports FY 2012 results in May 2012. However, I am aware that as there is a downturn, the Company may decide to conserve cash and reduce the dividend to 10 cents/share, which means full-year dividend will come to 16 cents/share.

At the closing price of $3.85, this still represents a dividend yield of 4.15%, decent for a blue-chip company with no debts and strong recurring free-cash-flows. There is also the prospect of increased dividends in the years to come from ongoing business development activities to increase its line maintenance contracts, MRO activities and to forge more JVs and associated companies into its current stable.

[Contrarian]

> quick check shows that SIA Engineering has closed at its highest level of $3.85 since Sep 28,
> 2011

There was a good window where it was trading at $3.38 to $3.45. Golden moments to pick up. It is a core holding in my portfolio now.

> With the recent business developments announced from Feb 14-16, 2012, there is a
> reasonable chance for SIA Engineering to be able to maintain its final dividend of 14
> cents/share when it reports FY 2012 results in May 2012. However, I am aware that as there > is a downturn, the Company may decide to conserve cash and reduce the dividend to 10
> cents/share, which means full-year dividend will come to 16 cents/share.

Just sit tight... the aircraft oncoming boom will on strong next 3-5 years... All the engineering service companies will have their hands full servicing aircraft... just like the airport building boom a few years back

[Musicwhiz]

Just sit tight... the aircraft oncoming boom will on strong next 3-5 years... All the engineering service companies will have their hands full servicing aircraft... just like the airport building boom a few years back

Hi Contrarian,

Any news articles of the above trend materializing? Just curious as to where you obtained the information.

Thanks in advance for sharing!

[Contrarian]

There was a BT supplement on MRO industry business times last month when I was sitting on SIA flight. It basically said the number of aircraft ordered by all the major airlines is a significant number (i cannot remember the supply digits, but it is significant). I think it was on the week of the air show. I didnt keep it, apologies.

SIA EC's biggest competitor is Lufthansa - China JV. In the mid term, the business for MRO is big enough to support 2 giant competitors here.

[Drizzt]

would this bode well for Pteris as well?

[Contrarian]

Airport is a different story... Enough Liao. The boom is on the number of aircraft... AND servicing needs. Not on the carriers or the airports...

The story is similar to VICOM. Except that VICOM is local and SIA EC is regional.

[Musicwhiz]

There was a BT supplement on MRO industry business times last month when I was sitting on SIA flight. It basically said the number of aircraft ordered by all the major airlines is a significant number (i cannot remember the supply digits, but it is significant). I think it was on the week of the air show. I didnt keep it, apologies.

SIA EC's biggest competitor is Lufthansa - China JV. In the mid term, the business for MRO is big enough to support 2 giant competitors here.

Hi thanks very much for the info!

[ngcheeki]

Based on the above information, I suppose ST Engineering will be doing well in the near future.