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Singapore Airlines (C6L.SG)
13 Jul 2021 (617 views)  

Singapore Airlines showed a loss of $3.2 billion for 2020. To cover this loss and build a cash reserve, it will issue $6.2 billion in convertible loans.

It pays a dividend that represents 1% of the current share price of $5.02. The analyst consensus target price is $4.38 a drop of  13%. 

The current book value per share is $5.36. The current stock price reflects a discount of 6% from the net assets. 

Financial results

The positive factors for Singapore Airlines are:

a) Air travel is expected to resume into and out of Singapore, under our new approach of "living with covid". The mandatory Stay Home Notice will be removed.

b) SIA is well funded with the latest bond issue. 

c) There will be less competition from regional airlines which are cash strapped.

Reuters
Analysis: Cash-rich Singapore Airlines aims for regional dominance as rivals pull back
 

Singapore Airlines Ltd (SIA), flush with $16 billion raised since the start of the pandemic thanks to help from a state investor, is in a position of dominance among its Southeast Asian rivals as they downsize and restructure.

The crisis threatened the survival of hub carriers that lack domestic markets such as SIA, Hong Kong's Cathay Pacific Airways Ltd and Dubai's Emirates. Indeed, Singapore Prime Minister Lee Hsien Loong last year said the government would "spare no effort" to ensure SIA made it through the pandemic.

Its majority shareholder, government-owned investment arm Temasek Holdings underwrote one of the world's biggest airline rescue packages. Thanks to that, SIA's has enough funds to keep going for at least two more years without cuts, and is modernising its fleet to save fuel, reduce maintenance costs and meet environmental goals while other airlines shed aircraft.

"The crisis shows the importance of having a cash-rich state investor as its main backer," said a banker, who was not authorised to speak with media and spoke anonymously.

SIA's cash pile is the envy of rivals like Thai Airways and Garuda Indonesia, which have received little government support. Many of SIA's rivals are trimming fleets to a level that could ultimately weaken their hubs and send more connecting traffic to Singapore.

Is Singapore Airlines worth investing, for its recovery. I am undecided.

Note - I am giving a personal opinion. Do not take my view as investment advice. Do your own research before you invest.

Tan Kin Lian
 



Singapore Airlines (C6L.SG)
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Singapore Airlines showed a loss of $3.2 billion for 2020. To cover this loss and build a cash reserve, it will issue $6.2 billion in convertible loans.

It pays a dividend that represents 1% of the current share price of $5.02. The analyst consensus target price is $4.38 a drop of  13%. 

The current book value per share is $5.36. The current stock price reflects a discount of 6% from the net assets. 

Financial results

The positive factors for Singapore Airlines are:

a) Air travel is expected to resume into and out of Singapore, under our new approach of "living with covid". The mandatory Stay Home Notice will be removed.

b) SIA is well funded with the latest bond issue. 

c) There will be less competition from regional airlines which are cash strapped.

Reuters
Analysis: Cash-rich Singapore Airlines aims for regional dominance as rivals pull back
 

Singapore Airlines Ltd (SIA), flush with $16 billion raised since the start of the pandemic thanks to help from a state investor, is in a position of dominance among its Southeast Asian rivals as they downsize and restructure.

The crisis threatened the survival of hub carriers that lack domestic markets such as SIA, Hong Kong's Cathay Pacific Airways Ltd and Dubai's Emirates. Indeed, Singapore Prime Minister Lee Hsien Loong last year said the government would "spare no effort" to ensure SIA made it through the pandemic.

Its majority shareholder, government-owned investment arm Temasek Holdings underwrote one of the world's biggest airline rescue packages. Thanks to that, SIA's has enough funds to keep going for at least two more years without cuts, and is modernising its fleet to save fuel, reduce maintenance costs and meet environmental goals while other airlines shed aircraft.

"The crisis shows the importance of having a cash-rich state investor as its main backer," said a banker, who was not authorised to speak with media and spoke anonymously.

SIA's cash pile is the envy of rivals like Thai Airways and Garuda Indonesia, which have received little government support. Many of SIA's rivals are trimming fleets to a level that could ultimately weaken their hubs and send more connecting traffic to Singapore.

Is Singapore Airlines worth investing, for its recovery. I am undecided.

Note - I am giving a personal opinion. Do not take my view as investment advice. Do your own research before you invest.

Tan Kin Lian