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(Singapore Airlines), explaining why buying back at $6.50 (after selling earlier at ~$6.59) makes sense, its strengths, and its recent & expected dividend picture. Let me know if you want me to tailor it more towards your trading horizon (short vs long term).

$SIA(C6L.SI)$  

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Re-entry into SIA at $6.50 — Investor Journal Entry

I recently sold my SIA shares at $6.59, taking profits on a bounce or near resistance. Since then, the stock has pulled back to $6.50. That discount of ~$0.09 per share isn’t huge in absolute terms, but in percentage terms it’s meaningful enough to justify buying back, given the fundamentals and dividend yield. Buying back here lowers my cost basis, increases potential upside, and gives me more margin of safety if markets dip or SIA faces near-term headwinds.

The logic is:

• Prices have retraced not due to any obvious negative surprise large enough to change the story; more due to macro-pressure, fuel cost volatility, and competition on yields.

• The pullback presents a chance to re-enter with a slightly better risk/reward profile.

• Holding SIA isn’t just about capital gain — the annual dividend yield and income component are material, so getting more yield for my share investment helps.

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SIA’s Strengths

Here are the key strengths of Singapore Airlines that make me comfortable re-entering:

1. Strong Brand, Reputation & Premium Product

SIA is long-renowned globally for its customer service, in-flight experience, premium cabins, and its “Singapore Girl” brand. This allows it to command loyalty, justify premium pricing (when demand is strong), and differentiate vs many competitors. 

2. Strategic Hub & Network

Singapore is very well placed geographically; SIA’s route network between Asia, Europe, Oceania, and increasingly North America gives it strong traffic flows. Its role as a connecting hub (with good airport infrastructure, Changi) helps. 

3. Fleet Modernisation & Operational Efficiency

The airline has relatively young and efficient aircraft, and invests in cabin upgrades (e.g. retrofitting A350-900s). That means better fuel efficiency, lower maintenance relative to older fleets, and possibly lower per-unit cost if capacity is well managed. 

4. Diversification:

• Through Scoot (its low-cost arm), which lets SIA participate in budget travel segments, feed traffic, and compete on cost when required. 

• Cargo: When passenger demand dropped (e.g. during COVID), cargo and belly-hold freight provided resilience. Even now, cargo revenues remain meaningful, especially for perishables and e-commerce. 

5. Strong Financial Position & Prudence

SIA has shown disciplined cash management, has reduced debt (Debt/Equity ~0.82 in FY2024/25), solid equity base, good liquidity, and has redeemed its Mandatory Convertible Bonds (MCBs). That makes it less vulnerable to macro shocks. 

6. Recovery & Demand

Post-COVID, air travel demand has rebounded strongly. Passenger numbers are hitting records; the recovery has been ahead of many peers in the Asia-Pacific region. That bodes well for revenue growth (though yields are under pressure) as borders reopen, business travel returns, etc. 

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Key Risks / Weaknesses to Watch

To be fair, these are the headwinds or risks I’m factoring in:

• Yield compression: More capacity globally means ticket prices are under pressure. Passenger yields have declined. 

• Operating costs: Fuel volatility, rising labour, maintenance and airport charges, inflation etc., remain risks. Even with a modern fleet, fuel and ex-fuel costs matter. 

• Competition: Both from full-service rivals increasing capacity, and from low-cost carriers, especially in regional markets.

• External shocks: Macroeconomic downturns, geopolitical issues, fuel price spikes, regulatory/tariff impacts (e.g. trade tensions) etc. SIA is exposed to global risks.

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Recent/Annual Dividend & Yield

This is an important part of my rationale, because dividend income mitigates risk and improves total return.

Here’s what the latest dividend data looks like:

Financial Year Interim Dividend Final Dividend (or Proposed) Total Dividend per Share

FY2024/25 10 cents 30 cents 40 cents 

FY2023/24 10 cents 38 cents 48 cents 

FY2022/23 10 cents 28 cents 38 cents 

• The proposed final dividend for FY2024/25 is 30 cents one-tier per share, and there was an interim dividend of 10 cents. 

• For FY2023/24, total was 48 cents, which gave a yield in that year of around 7.5% based on then-share price metrics. 

To estimate current yield (if buying back at $6.50):

• If SIA gives the 40 cents total again, then the dividend yield is ^(0.40 ÷ 6.50) ≈ 6.15% per annum.

• If somehow they reverted to the higher 48 cents (though recent trend shows a drop to 40c), yield would be ^(0.48 ÷ 6.50) ≈ 7.38%.

Given current outlook and management’s statements, 40 cents looks more realistic for FY2024/25. So the ~6.1-6.5% yield is what I’d expect if I re-enter now.

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Financials & Recent Performance

• FY2024/25 revenue rose to a record S$19,540 million (up ~2.8% YoY) driven by travel demand and cargo. 

• Net profit (including a one-off gain from the Air India-Vistara merger) came in at ~S$2.78 billion. 

• Core operating profit was weaker in some segments; in Q1 of FY2025/26 (recent), net income dropped ~59% YoY to ~S$186.1 million due to rising costs and weaker yields. 

• Operating metrics like passenger load factors remain quite strong (∼87-88%), showing demand is robust. 

• Debt-equity is moderate (~0.82), and cash balances are still healthy. 

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Putting It All Together – Why Buy Back at $6.50

1. Better Entry = Better Income

Lowering my entry cost means I lock in a better yield. If 40 cents p.a. is paid, buying at $6.50 gives ~6.15% vs buying at $6.59 gives ~6.06%. Not a huge difference, but every bit helps, especially with potential upside.

2. Margin of Safety

If yield is that high, the market might expect risks. But given SIA’s strengths and track record, this price affords some buffer against downside (fuel shocks, yield drops etc.).

3. Total Return More Attractive

With income + capital appreciation, re-entry at this level enhances my total return potential. If demand strengthens further (business travel, premium routes), and if yields don’t deteriorate badly, there’s room for capital gains. Combined with dividends, the risk/reward is attractive.

4. Confidence in Long-Term Resilience

Despite some recent downturns in profit, SIA has shown ability to manage cycles, maintain brand prestige, and have diversified revenue streams (premium, cargo, Scoot). Their balance sheet discipline helps cushion macro risks.

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Conclusion

I believe buying back at $6.50 is a reasonable move:

• It lowers my cost basis and improves yield.

• SIA still has strong competitive advantages: brand, network, fleet, financial strength.

• The recent dividend trend gives me confidence in decent income, even if it’s slightly lower than peak.

• There are risks (yield drop, cost pressures, competition), but priced in reasonably at this level.

If I were in a growth-only mindset, I might demand a bigger discount or wait for a clearer catalyst. But since I also care about yield and income, this is an opportunity that I’m comfortable taking.

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@Wrtd @MillionaireTiger @Daily_Discussion @MillionaireTiger @MillionaireTiger