Excerpts from UOB Kay Hian report
Analysts: Andrew Chow, CFA, & the Singapore Research Team
| In our view, several companies may consider paying special dividends in 2016. These include SIA and SIA Engineering (SIAEC).
Special dividend in store?
We expect SIAEC to distribute the bulk of the divestment gains from the disposal of HAESL. We estimate SIAEC’s dividend payout (final+special) of 21 S cents per share, assuming a 90% payout ratio.
Similarly, we expect SIA to distribute a final dividend of 42 S cents per share, assuming full payout of SIAEC’s divestment gains. The timing for a potential special payout for SIA and SIAEC is expected in May.
Lastly, we think CD may also give out a special dividend, possibly in 2H16/1H17 upon the sale of its buses back to the government as part of the government contracting model (GCM).
We estimate a potential special dividend payout of 21.6-25.0 S cents/share, assuming: a) the government buys bus assets from SBS Transit (SBS T) at 0.9-1.0x P/B, b) SBS T pays down 50% of its outstanding debt, and c) the remaining net cash is fully paid out as a special dividend.
Full report here.