Company Name: SINGAPORE TECH ENGINEERING LTD
| Research House: Nomura | Price Call: BUY | Target Price: 4.05 |
Nomura said Singapore aviation maintenance, repair and overhaul service providers such as Singapore Technologies Engineering and SIA Engineering Co are set to benefit from air traffic growth in Asia Pacific.
ST Engineering shares were flat at $3.45 while SIA Engineering was unchanged at $4.19 on Friday.
Commercial MRO business in 2012 is expected to increase 5.7% to $49.5 billion from a year earlier and then grow at a compounded annual growth rate of 3.7% between 2012 and 2017, Nomura said, citing a consultancy’s forecast.
Large, well-capitalised MROs with presence across regions as well as capabilities and competence to develop new product lines are better placed to take advantage of the aviation upturn, Nomura added.
Nomura has a ‘buy’ rating and S$4.05 target price on ST Engineering, and a ’neutral’ call with a $4.60 target price on SIA Engineering.
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