Date of Report
October 3, 2024
Broker Name
CGS International
Company Overview
ST Engineering Ltd is a global technology, defense, and engineering group that leverages innovation to solve complex problems across various sectors, including aerospace, smart cities, defense, and public security.
Market Outlook
- Growth Potential: New foreign ammunition contracts and larger defense contracts are anticipated in the coming months.
- Operational Performance: The company’s defense operating profit margin (OPM) is expected to sustain at approximately 13%, indicating strong financial health.
Technical Analysis
- Recommendation: Maintain Add
- Target Price: S$5.30 (based on a price-to-earnings ratio of 20x for CY25F)
Industry Position
- MRO Tailwinds: The company is expected to benefit from Maintenance, Repair, and Overhaul (MRO) tailwinds, supported by positive commentary from peers such as AAR Corp and a slow pace of new aircraft deliveries.
Conclusion
ST Engineering is well-positioned for future growth, driven by potential new contracts and a favorable operational environment, reinforcing its status as a key player in the global defense and technology sectors.
