Is SIA Engineering’s current share price sustainable?

SINGAPORE (May 16): SIA Engineering (SIAEC) has seen its share price rise by 18.5% this year. But UOB Kay Hian believes its current valuation is unlikely to be sustainable.

According to UOB lead analyst K Ajith, the run-up in SIAEC’s stock was largely due to expectations of a special dividend.

SIAEC has recommended a final ordinary dividend of 9.0 cents and a special dividend of 5.0 cents per share for FY2016-17. Together with the interim dividend paid earlier, the total dividend payment for the year will be 18.0 cents per share – 4.0 cents per share higher than a year ago.

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