Wednesday, May 23, 2012

Tiger Airways - Buy with Target Price of $0.92?

DBS maintained its Buy call on Tiger Airways with a target price of $0.92.  While losses that continued for a third straight quarter in 4Q12 was largely expected, they are expecting Tiger Airways to turnaround from 2Q FY13 when operations start to commence at the new base in Sydney.

In addition, while most of the net losses was attributable to higher fuel price and the suspension of Australian operations for six weeks last year (including the limited operating schedule thereafter), they expect unit cost to peak in FY12 with jet fuel prices moderating.  Compared to CIMB, it expects Tiger Airways to turnaround by 3Q FY13.  Tiger Airways is expected to breakeven for FY13 and register S$67mil in net profits for FY14.

We should keep this post sticky to see whether this does come true in FY13 and FY14.

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