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SIA revived
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NT1825
Master |
22-May-2021 20:20
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Hold on. In 2030 - the MCB holder will get ordinary shares at $4.84 each. If the traded price is much lower then say $2.65 - isn' t better to buy from open market? Alot can happen in 9 years On the other hand, one can also predict that the price can go up to $10. Do take note SIA can buy back anytime before that. So who has the controlling card?
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Joelton
Supreme |
22-May-2021 14:20
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Analysts mixed on SIA after results release lower TP
AFTER SIA: C6L +0.21%reported a " staggering" loss, analysts have cut their target prices for the stock. But at least one of them now thinks it might be time for investors to add to their holdings.
CGS-CIMB analyst Raymond Yap, who called the full-year net loss of S$4.27 billion staggering when compared to the national carrier' s S$0.2 billion loss in FY2020, has nevertheless upgraded his call on SIA to an " add" .
SIA' s recent share price decline has created an opportunity for investors to accumulate the stock ahead of a likely reopening of borders next year, Mr Yap said in a report on Thursday.
Shares of SIA have declined by nearly 17 per cent from a year-to-date peak in April. They closed Friday at S$4.77, up S$0.01 or 0.2 per cent for the day.
Mr Yap has, however, lowered his target price on SIA to S$5.64, from S$6 previously.
The lower target price was to take into account SIA' s plan to raise S$6.2 billion via the issue of mandatory convertible bonds (MCBs).
Mr Yap has adjusted his book value per share forecast treating half of the MCBs as debt. " We have assumed that SIA will endeavour to redeem half of the MCBs before their 10-year maturity or will refinance them using other sources of debt," he said.
Several other research houses joined Mr Yap in lowering their target price.
UOB Kay Hian (UOBKH), which has a &ldquo sell&rdquo call on SIA, cut its target price to S$4.15 from S$4.40 previously to factor in dilution from the MCBs.
UOBKH analyst K Ajith said he has " treated the MCB as equity but factored in annual dilution from the accrued interest" .
OCBC Investment Research, meanwhile, lowered its fair-value estimate to S$4.75, from S$4.80 previously. The research house has a " hold" call on the stock.
Like CGS-CIMB, OCBC has treated the MCBs as half debt and half equity.
The renounceable MCBs will be offered on the basis of 209 rights MCBs for every 100 existing SIA shares at an issue price of S$1 per rights MCB, with an initial conversion price of S$4.84 per share and zero coupon.
Implied yield will depend on the timing of the redemption, but will be between 4 per cent and 6 per cent. If SIA chooses not to redeem them, the MCBs will convert into ordinary shares upon maturity on June 8, 2030.
Providing updates for the quarter, SIA said it has managed to slash its monthly cash burn rate to the range of S$100-150 million monthly, from S$350 million a year ago.
Analysts agreed this is a positive sign, but UOBKH' s Mr Ajith warned that a reduction in government grants would likely lead to higher cash burn if borders do not open.
He also flagged risks in SIA' s plans to raise capacity back to 32 per cent of pre-Covid levels by July this year.
&ldquo While SIA expects the incremental bellyhold cargo on such flights to cover variable costs, losses could potentially rise if capacity is too aggressive and if cargo yields start to falter,&rdquo he said.
CGS-CIMB&rsquo s Mr Yap was more upbeat. SIA' s access to cash is &ldquo second to none in the aviation industry&rdquo , he said. Despite its losses, the company' s net gearing fell and its cash balances rose. " Unless there are some one-off factors, SIA appears to be heading in the right direction."
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Adrianinsing
Elite |
22-May-2021 11:47
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The trading pattern of the past two weeks &ndash particularly alongside cryptocurrency&rsquo s movements &ndash suggests stocks including SIA could continue to be volatile in the week ahead as people take their profits on any run up in any global stock to offset their losses on crypto !
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maxlim3
Member |
21-May-2021 20:43
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I think is dilute 60 percent and not 40 percent. And not to mention the losses that the comoany had incurred of around 1.3 per share.
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vicloo
Supreme |
21-May-2021 19:28
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It was diluted by 40% with rights issue at starts of pandemic, before pamdemic SIA was 11, 40% dliution means 6.6 is already pre-covid price... 10 means is much better than before pandemic... not likely.
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boringGame
Member |
21-May-2021 19:18
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dont anyhow quote a TP
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1oopls
Master |
21-May-2021 18:34
Yells: "I love my evil cute cute darling" |
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moredownside to follow we havent even cb yet | ||||
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Adrianinsing
Elite |
21-May-2021 18:31
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The key questions ...
Negative ... 1. Will SIA be delisted and bought back by the government? Downside: Low price ? 2. Will this Covid situation last more than a year more? Downside: depends 100% on international traffic so burns $ Positive ... 1. Given the enormous enthusiasm investors seem to have to buy SIA shares the direction is north 2. The government will never allow SIA to collapse |
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Panda8
Veteran |
21-May-2021 17:14
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For counters like ComfortDelGro, Teng expects weakness from lower rail ridership and taxi rental rebates, while analyst K Ajith believes shares in SIA have &ldquo potential downside&rdquo to $4 assuming a target price to book (P/B) of 1.0 times FY2022/2023 average book value. | ||||
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Panda8
Veteran |
21-May-2021 17:13
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https://www.theedgesingapore.com/capital/brokers-calls/uob-kay-hian-favours-counters-strong-earnings-growth-and-those-majority | ||||
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Inferno
Senior |
21-May-2021 16:52
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Probably the experts can ascertain if the maths is correct. However if TH owns more than 90% then might as well trigger compulsory aquisition and take it private.
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Adrianinsing
Elite |
21-May-2021 16:41
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SIA bullish - easily hit $5.30 next week
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cltlighter
Senior |
21-May-2021 16:36
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If you check cdp lending pool (SBL), you will find that you can' t find SIA in the list from today onwards. All the short (SBL) have to be bought back now for MCB. The share price is kind of supported by the way when shortist needs to buy back to cover short.
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mav1ryan
Veteran |
21-May-2021 16:28
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I am coming from the point of SIA net value is $20.5B, and TH now holds 55% ($11.37B). The MCB worth $9.2B and assuming TH told 95% of it, will be $8.7B, plus original holding will be $20.11B... plus some loose ends here and there, I am taking the assumption that TH will have ~95% (or at least 90%) of SIA share after exercising MCB...
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f16force
Senior |
21-May-2021 16:22
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Temasek is unlikely to hold more than 90% of Sia even if all MCBs are exercised by Temasek. Currently Temasek has about 52% stake. Sia has about 3 billion shares outstanding. Total McB issued is about $9.7 billion.... once exercised at $4.84, about 2 billion new Sia shares will be issued. So the most Temasek will hold will still be less than 80% in extreme case. correct me if I am wrong......😊
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mav1ryan
Veteran |
21-May-2021 16:04
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Well if SIA cannot recovers say 10 years later and TH wil have to eat all the shit from the MCB. That practically means that TH will own > 90% of SIA... and what left behind will be nationalisation of SIA or equivalent.
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jesmarnew
Senior |
21-May-2021 15:55
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Good chance to buy now with rights!!!! ONce pandemics over will be profitable with 50m profit per year!!! Buy before shoot up $10!!! Every year dividend 50 cts 10 yrs get back !!! | ||||
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robinhoot
Member |
21-May-2021 15:28
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Wouldn' t touch it with a 10-foot pole
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TigerPlay
Master |
21-May-2021 15:25
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Thanks for the video, is very informatiove. 1 other reason for country to have airline is oso to create jobs which SiA is doing and providing transport, just like buses and train, and if in the process making money from it, why not. So, TmH is not wrong in supporting SiA imho. Let SiA fly high
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Kai189
Veteran |
21-May-2021 15:24
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I think the brokerages are right. when ppl buy u sell, when ppl sell u buy. oooo. vested ! as FIR sings- Fly away
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