SGX:S59

Stock Analysis Report

Executive Summary

SIA Engineering Company Limited, together with its subsidiaries, provides maintenance, repair, and overhaul (MRO) services to airlines carriers and aerospace equipment manufacturers worldwide.

Rewards

Trading at 23.5% below its fair value

Earnings are forecast to grow 4.4% per year

Risk Analysis

Unstable dividend track record



Snowflake Analysis

Flawless balance sheet second-rate dividend payer.


Similar Companies

Share Price & News

How has SIA Engineering's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: S59 has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

0%

S59

0.6%

SG Infrastructure

0.2%

SG Market


1 Year Return

22.1%

S59

6.1%

SG Infrastructure

2.4%

SG Market

Return vs Industry: S59 exceeded the SG Infrastructure industry which returned 6.1% over the past year.

Return vs Market: S59 exceeded the SG Market which returned 2.4% over the past year.


Shareholder returns

S59IndustryMarket
7 Day0%0.6%0.2%
30 Day-0.4%-1.0%-1.3%
90 Day10.2%-2.1%-0.1%
1 Year27.1%22.1%9.2%6.1%6.6%2.4%
3 Year-4.7%-16.1%17.7%8.4%17.3%4.7%
5 Year-12.1%-27.9%18.5%4.2%14.6%-4.7%

Price Volatility Vs. Market

How volatile is SIA Engineering's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is SIA Engineering undervalued compared to its fair value and its price relative to the market?

23.5%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: S59 (SGD2.82) is trading below our estimate of fair value (SGD3.69)

Significantly Below Fair Value: S59 is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: S59 is poor value based on its PE Ratio (18.6x) compared to the Infrastructure industry average (12.2x).

PE vs Market: S59 is poor value based on its PE Ratio (18.6x) compared to the SG market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: S59 is poor value based on its PEG Ratio (4.2x)


Price to Book Ratio

PB vs Industry: S59 is overvalued based on its PB Ratio (2.1x) compared to the XA Infrastructure industry average (1x).


Next Steps

Future Growth

How is SIA Engineering forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

4.4%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: S59's forecast earnings growth (4.4% per year) is above the savings rate (1.8%).

Earnings vs Market: S59's earnings (4.4% per year) are forecast to grow slower than the SG market (6.6% per year).

High Growth Earnings: S59's earnings are forecast to grow, but not significantly.

Revenue vs Market: S59's revenue (2.6% per year) is forecast to grow slower than the SG market (5.6% per year).

High Growth Revenue: S59's revenue (2.6% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: S59's Return on Equity is forecast to be low in 3 years time (11.9%).


Next Steps

Past Performance

How has SIA Engineering performed over the past 5 years?

-4.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: S59 has high quality earnings.

Growing Profit Margin: S59's current net profit margins (16.6%) are lower than last year (18%).


Past Earnings Growth Analysis

Earnings Trend: S59's earnings have declined by -4.6% per year over the past 5 years.

Accelerating Growth: S59's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: S59 had negative earnings growth (-10.5%) over the past year, making it difficult to compare to the Infrastructure industry average (1.2%).


Return on Equity

High ROE: S59's Return on Equity (10.7%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is SIA Engineering's financial position?


Financial Position Analysis

Short Term Liabilities: S59's short term assets (SGD941.9M) exceed its short term liabilities (SGD243.9M).

Long Term Liabilities: S59's short term assets (SGD941.9M) exceed its long term liabilities (SGD123.2M).


Debt to Equity History and Analysis

Debt Level: S59's debt to equity ratio (1%) is considered satisfactory.

Reducing Debt: S59's debt to equity ratio has reduced from 2.1% to 1% over the past 5 years.

Debt Coverage: S59's debt is well covered by operating cash flow (625.1%).

Interest Coverage: S59 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: S59 has a high level of physical assets or inventory.

Debt Coverage by Assets: S59's debt is covered by short term assets (assets are 60x debt).


Next Steps

Dividend

What is SIA Engineering's current dividend yield, its reliability and sustainability?

3.90%

Current Dividend Yield


Dividend Yield vs Market

company3.9%marketbottom25%2.6%markettop25%5.5%industryaverage2.7%forecastin3Years4.5%

Current dividend yield vs market & industry

Notable Dividend: S59's dividend (3.9%) is higher than the bottom 25% of dividend payers in the SG market (2.56%).

High Dividend: S59's dividend (3.9%) is low compared to the top 25% of dividend payers in the SG market (5.46%).


Stability and Growth of Payments

Stable Dividend: S59's dividend payments have been volatile in the past 10 years.

Growing Dividend: S59's dividend payments have fallen over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (72.5%), S59's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: S59's dividends in 3 years are forecast to be covered by earnings (78.3% payout ratio).


Next Steps

Management

What is the CEO of SIA Engineering's salary, the management and board of directors tenure and is there insider trading?

3.5yrs

Average management tenure


CEO

Kim Chiang Png (60yo)

4.7yrs

Tenure

S$2,006,541

Compensation

Mr. Png Kim Chiang has been the Chief Executive Officer of SIA Engineering Company Limited since April 1, 2015 and served as its Executive Vice President of Operations from April 1, 2010 to March 31, 2015. ...


CEO Compensation Analysis

Compensation vs Market: Kim Chiang's total compensation ($USD0.00) is below average for companies of similar size in the SG market ($USD1.49M).

Compensation vs Earnings: Kim Chiang's compensation has been consistent with company performance over the past year.


Management Age and Tenure

3.5yrs

Average Tenure

60yo

Average Age

Experienced Management: S59's management team is considered experienced (3.5 years average tenure).


Board Age and Tenure

4.6yrs

Average Tenure

59yo

Average Age

Experienced Board: S59's board of directors are considered experienced (4.6 years average tenure).


Insider Trading

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Stephen Lee (72yo)

    Special Advisor to the Board of Directors

    • Tenure: 1.4yrs
    • Compensation: S$215.00k
  • Ivan Neo

    Executive VP of Operations

    • Tenure: 3.7yrs
  • Kim Chiang Png (60yo)

    CEO & Director

    • Tenure: 4.7yrs
    • Compensation: S$2.01m
  • Zarina Piperdi (58yo)

    Senior VP of Human Resources

    • Tenure: 13.1yrs
  • Yue Jeen Wong

    Senior VP of Aircraft & Component Services

    • Tenure: 4.3yrs
  • Kean Shuh Foo

    Senior VP of Line Maintenance & Cabin Services

    • Tenure: 3.5yrs
  • Philip Quek

    Senior VP of Partnership Management & Business Development

    • Tenure: 3.2yrs
  • Lay Pheng Ng

    Senior VP of Finance & CFO

    • Tenure: 2.3yrs
  • May Lyn Tan

    Assistant Manager of Corporate Communications

    • Tenure: 0yrs
  • Wilin Ng

    Senior Vice President of Innovation

    • Tenure: 0.7yrs

Board Members

  • Kin Fei Tang (68yo)

    Independent Chairman of the Board

    • Tenure: 1.4yrs
    • Compensation: S$153.81k
  • Kim Chiang Png (60yo)

    CEO & Director

    • Tenure: 4.7yrs
    • Compensation: S$2.01m
  • Choon Phong Goh (56yo)

    Non-Executive & Non-Independent Director

    • Tenure: 8.9yrs
    • Compensation: S$107.00k
  • Siew Kim Wee (59yo)

    Independent Non-Executive Director

    • Tenure: 2.6yrs
    • Compensation: S$98.55k
  • Yau Seng Chin (48yo)

    Non-Executive Non independent Director

    • Tenure: 1.2yrs
  • Chin Hwee Ng (58yo)

    Non-Executive & Non-Independent Director

    • Tenure: 11.4yrs
    • Compensation: S$114.00k
  • Raj Thampuran (55yo)

    Non-Executive & Independent Director

    • Tenure: 3.3yrs
    • Compensation: S$103.00k
  • Christina Ong Hon (68yo)

    Non-Executive & Independent Director

    • Tenure: 5.9yrs
    • Compensation: S$134.84k
  • Manohar Ramesh Khiatani (59yo)

    Independent Non-Executive Director

    • Tenure: 6.7yrs
    • Compensation: S$124.00k
  • Teck Soon Chew (67yo)

    Independent Non-Executive Director

    • Tenure: 6.6yrs
    • Compensation: S$141.51k

Company Information

SIA Engineering Company Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: SIA Engineering Company Limited
  • Ticker: S59
  • Exchange: SGX
  • Founded: 1982
  • Industry: Airport Services
  • Sector: Transportation
  • Market Cap: S$3.148b
  • Shares outstanding: 1.12b
  • Website: https://www.siaec.com.sg

Number of Employees


Location

  • SIA Engineering Company Limited
  • 31 Airline Road
  • Singapore
  • 819831
  • Singapore

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
SEGS.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 2000
S59SGX (Singapore Exchange)YesOrdinary SharesSGSGDMay 2000
O3HBST (Boerse-Stuttgart)YesOrdinary SharesDEEURMay 2000
SEGS.YOTCPK (Pink Sheets LLC)UNSPONSORD ADRUSUSDNov 2008

Biography

SIA Engineering Company Limited, together with its subsidiaries, provides maintenance, repair, and overhaul (MRO) services to airlines carriers and aerospace equipment manufacturers worldwide. The company  ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/12/13 12:37
End of Day Share Price2019/12/13 00:00
Earnings2019/09/30
Annual Earnings2019/03/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.