S$1.00-TIGA.SI
We believe the fact that Tiger closed half cent above the day’s low of 99.5 cents was likely a case of roundophobia.
The damage to its reputation (and even SIA’s as its largest shareholder - just read the reports in papers in Australia, UK) cannot be underestimated. It is the first time in Australia’s aviation history, and that’s a first world country.
Furthermore, Australia’s civil aviation authorities are working on extension of the grounding order beyond July 9th.
While price-to-book has fallen to 2.8x from 3.3x before the shock (book is 36 cents a share), it is arguable whether its is enticing enough.
Not when one looks at Tiger as one would (say) a dotcom stock. Its hitherto high valuation depended on management’s ability to develop more hubs outside Singapore. Unfortunately, after the unsuccessful attempts in South Korea, Thailand, the Philippines, and now the possibly fatal blow in Australia, investors have to question Tiger’s future.
We would not be tempted, at least not yet.
No comments:
Post a Comment