Still, investors are expecting a "potentially strong" final dividend per share (DPS), which "may keep share price elevated for now", says Yap in an April 22 note.
Hence, Yap is maintaining "hold" on SIA with an unchanged target price of $6, noting that the upcoming final DPS is "key" to its stock price.
SIA will announce its financial results for FY2025 ended March 31 on May 15 after trading hours. CGSI's Yap expects SIA to announce 4QFY2025 core net profit of between $200 million and $250 million, which is about 60% lower q-o-q, owing to softer passenger yields but partially compensated by lower jet fuel prices.
The timing of aircraft maintenance expenses, however, could impact the accuracy of the estimates, adds Yap.
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Final dividend likely 20 cents
Yap expects SIA's final dividend to be minimally 20 cents per share. In addition to the earlier interim DPS of 10 cents, this represents a payout ratio of 59% - broadly in line with FY2023's 58% and FY2024's 56%.
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But Yap has also pencilled in a final DPS of 30 cents, as he thinks SIA may pay some of the 37 cents per share exceptional gain of some $1.1 billion from the disposal of Vistara, even though the gain is non-cash in nature.
For FY2024, SIA had declared a bumper final DPS of 38 cents on May 15, 2024, and its share price remained "well-supported" until the ex-date on Aug 1, 2024.
"Similarly, we expect SIA's share price to stay elevated until the final DPS ex-date (likely to be in late-July/early-August)," writes Yap.
SIA shares changed hands 6 cents higher, or 0.91% up, at $6.65 at 2.31pm.
Chart: CGSI
