2024 Performance Overview:
Singapore Technologies Engineering (STE SP) posted a core net profit of S$681 million for 2024, reflecting a 23% year-on-year (yoy) increase, slightly exceeding expectations at 102.3% of the full-year forecast. The better-than-expected margins from its Commercial Aerospace (CA) and Urban Solutions & Services (USS) segments contributed to this positive performance. Headline net profit grew by 20% yoy to S$702 million. In line with its solid earnings, ST Engineering declared a higher fourth-quarter dividend of 5 Singapore cents, marking an increase of 1 cent compared to the previous year.
Growth Outlook and Orderbook Strength:
The company’s growth outlook remains positive in the medium term, bolstered by a record-high orderbook of S$28.5 billion as of the end of 2024. This strong order backlog provides robust growth visibility, supporting the company’s strategic initiatives across its aerospace, smart city, defense, and public security segments.
Investment Recommendation:
ST Engineering’s shares are currently priced at S$5.25, with a target price of S$5.55, indicating a potential upside of 5.7%. The target price was revised upward from the previous S$4.95, reflecting the company’s strong performance and growth prospects. Analysts maintain a “BUY” recommendation, citing continued demand and strategic positioning within its diversified portfolio.
Market Position and Shareholders:
ST Engineering is recognized as a global technology and defense leader, catering to aerospace, smart city, defense, and public security markets. The company has a market capitalization of S$16.35 billion (US$12.19 billion) with Temasek Holdings holding a significant 51.7% stake.
This robust performance and strategic growth outlook reinforce ST Engineering’s standing as a key player in the global technology and engineering landscape, making it an attractive investment proposition.
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