DBS cuts target on Tiger to $1.50; keeps hold

Stock Name: TigerAir
Company Name: TIGER AIRWAYS HOLDINGS LIMITED
Research House: DBS Vickers

DBS Vickers has lowered its target price on Singapore budget carrier Tiger Airways (TAHL.SI) to $1.50 from $1.60 and maintained its hold rating.

Tiger reported fourth quarter net profit of $1.3 million, compared with $22.3 million a year earlier, hurt by deferred tax charges, unfavourable weather conditions in Australia and higher fuel prices.

Separately, the carrier announced that it had agreed to acquire a 33% stake in Indonesia's PT Mandala Airlines for an undisclosed amount.

DBS Vickers said Tiger's fourth quarter results were below expectations as ticket prices failed to keep pace with oil costs. Visibility about Tiger's potential Mandala stake acquisition is limited at this point, the brokerage added.

It remained concerned about delays in the execution of the Thai Tiger start-up, a budget airline alliance between Tiger and Thai Airways International Plc (THAI.BK), DBS Vickers said.

It added that it is viewing with caution a recent regulatory ruling in the Philippines barring Tiger's partner SEAIR from starting new domestic routes.

At 10:01 a.m., Tiger shares were down 1.3% at $1.53 on a volume of 286,000 shares.