Why are SIA shares rising?

• Singapore Airlines Ltd (SGX: C6l) share price rose to a high of S$5.32 on Tuesday (19 July 2022)
• The blue-chip counter’s shares are up by nearly 4% in the last one month
• The group reported a 13.7% month-on-month increase in passengers carried in June 2022
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SIA stock price: what’s the latest?

Singapore Airlines (SIA) shares has rallied 1.7% since it reported June 2022 operating results.

The airline group’s stock has been in an uptrend in the last one month, increasing roughly 3.5% since 20 June 2022.

On a year-to-date basis, SIA shares are up by 5.8%.

In terms of stock outlook, the national carrier has an average price target of S$5.38 and rating of ‘neutral’, based on the latest SGX StockFacts consensus data.

The price target represents a 1.5% upside potential from its last traded price of S$5.30.

The latest call came from UOB analyst Roy Chen, who kept a ‘hold’ rating and price target of S$4.85 on 14 July 2022.

He expects the group to report a net profit of between S$180 million to S$350 million for quarter one (Q1) FY2023, ‘driven by a strong pax volume recovery and strong airfares in recent months’.

He also deemed the current industry FY2023 full-year net profit forecast of S$316 million to be ‘conservative and due for positive surprises’. UOB has a full-year forecast of S$1.35 billion.

How did SIA Group fare in June 2022?

The SIA Group carried a total of 1.94 million passengers in June 2022, an increase of 13.7% from the previous month.

‘Robust demand for air travel during the mid-year holidays, coupled with the start of the summer travel season, has resulted in an exceptionally strong performance in June 2022,’ the group noted in the report.

Group passenger capacity (measured in available seat-kilometres) in June 2022 was three percentage points higher than the month before and 36% higher compared to a year ago, reaching 64% of pre-pandemic levels.

The group passenger load factor (PLF) reached a new pandemic-high of 85.5% (up 7.3 percentage points month-on-month and up 69.4 percentage points year-on-year). This was on the back of SIA posting a monthly PLF of 87.8%, a record for the airline.

During the month, low-cost carrier Scoot launched three times weekly flights to Jeju, South Korea.

At the end of June 2022, the group’s passenger network covered 98 destinations, including Singapore. SIA served 72 destinations while Scoot served 47 destinations as of end-June 2022.

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