🛫 ST Engineering Sell-Off: Opportunity Below $8?

ST Engineering slid 6.3% despite reporting a +19.7% rise in 1H25 net profit (S$402.8m vs S$336.5m YoY). The pullback comes after an 80% YTD rally, leaving investors asking: is this just profit-taking, or is valuation stretched?

🔎 Macro Factors

1. US Tariffs & FX Headwinds — Dragging on margins despite strong topline growth.

2. Global Aerospace Cycle — Strong demand recovery in commercial aerospace supports order book.

3. Defence Spending — Rising geopolitical tensions continue to anchor long-term revenue stability.

📊 Micro Factors & Levels

Cureent Price: just above S$8.00

Support Zones: S$7.80 (short-term floor), S$7.50 (major support).

Resistance Zones: S$8.40 (near-term cap), S$8.80 (breakout point).

Valuation: P/E remains elevated vs historical average, but earnings momentum justifies part of the premium.

🎯 Prediction

Bullish Case: Hold >S$8 → rebound to S$8.40–8.80, especially if aerospace momentum continues.

Neutral Case: Consolidation between S$7.80–S$8.20 as market digests YTD surge.

Bearish Case: Break <S$7.80 → correction risk to S$7.50.

✅ Takeaway

This pullback looks more like a healthy reset after an 80% run rather than a fundamental breakdown. Bargain hunters may step in under S$8, but sustained upside will require proof that earnings growth can outpace cost and tariff risks.

I'm not a financial advisor. Trade wisely, Comrades!