OCBC Investment Research has cut its target price for SIA Engineering (SIA Engg) on the firm's weak core earnings. It lowered the company's fair value from S$3.70 to S$3.63, but kept its "hold" rating on the stock.
SIA Engg shares fell five cents or 1.3 per cent to S$3.70 as at 11.40am on Wednesday. The stock is also trading on an ex-dividend basis.
The group said on Tuesday its net profit rose from S$41.3 million in the first quarter last year to S$198.4 million in Q1 2016.
But this was boosted by a S$141.6 million gain from the divestment of its 10 per cent stake in Hong Kong Aero Engine Services (HAESL) to Rolls-Royce Overseas Holdings and Hong Kong Aircraft Engineering Company.
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