Is ST Engineering A Buy?
๐๐๐ST Engineering (STE) $ST Engineering(S63.SI)$
STE was formed in 1997 when 4 companies merged. They were ST Aerospace, ST Electronics, ST Kinetics and ST Marine. Temasek Holdings owns 51% of STE and is the largest shareholder.
Shares of STE hit a 52 week high of SGD 4.81 in November 2024 but in 2025 there is a retracement to SGD 4.64. Is STE a Buy?
Let's check out STE latest earnings report. For 9M 2024, revenue climbed 14% year on year to SGD 8.3 billion with all 3 business segments recording year on year revenue growth.
Defence and Public Security segment is up 18% to SGD 3.644 billion for 9M 2024. Commercial Aerospace has risen by 16% to SGD 3.285 billion while Urban Solutions & Satcom segment is up 0.3% to SGD 1.373 billion.
STE continues to log impressive contract wins of SGD 8.4 billion for 9M 2024. Defence & Public Security won SGD 3.6 billion in contract while Commercial & Aerospace logged in SGD 2. 9 billion new contracts and Urban Solutions won SGD 1.8 billion in contracts.
As of September 30 2024, STE has a total order book of SGD 26.9 billion with SGD 2.6 billion to be delivered by the end of 2024.
An interim dividend of SGD 0.04 per share was declared, bringing its trailing 12 month dividend to SGD 0.16. The current dividend of STE is 3.45%. Dividends are paid 4 times per year.
In December 2024, STE ended the year with new contract in Kazakhstan after signing a strategic collaboration agreement with Kazakhstan Paramount Engineering (KPE) to set up a production capability in Kazakhstan for a new 8x8 amphibious multi purpose armoured vehicle. Although the contract value was not disclosed, it is a strategic win for STE's international defence business strategy as it marks STE's entry into a new market in Central Asia.
Other highlights of STE in 2024 include providing digital solutions and services in Cloud, Training & Simulation as well as Satellite Technologies. STE also received international orders for unmanned aerial system, 40mm ammunition and weapon systems as well as a weapon MRO contract from a customer in Middle East.
Under Commercial Aerospace, STE signed a 5 year exclusive nacelle contract for repair & overhaul services from a European airline. A nacelle is a streamlined container for aircraft parts such as engines, fuel or equipment. STE also received orders for its Airbus widebody and narrowbody programmes from leasing companies.
Under Urban Solutions & Satcom, STE won Smart Metro contracts for a new MRT line in Southeast Asia, Cross Island and Jurong Region line in Singapore. STE also won contracts for Smart City Operating System in Qatar, smart water solutions in Brazil and Healthcare ICT solutions in Hong Kong.
STE CEO Vincent Chong is optimistic about the group's business opportunities. He said that he is confident that STE can deliver revenue of over SGD 11 billion by 2026. An Investor Day is planned on 2025 to further communicate its goals and strategies. STE will continue to invest more in research and development to hone in its capabilities and grow its skill set.
Analysts are bullish on STE with a Buy rating, Target price of SGD 5.25, an upside potential of 13%.
I am simply amazed at the extensive capabilities of STE, a "made in Singapore" company and very proud of how far it has come since its inception in 1997. I have invested in STE in 2022 and I am happy with its slow and steady performance over the years.
Some people say that the Singapore stock market is boring but then when you delve deeper, it is filled with hidden treasures such as $ST Engineering(S63.SI)$ waiting to be discovered. With the solid backing of Temasek Holdings, I believe that STE has lots of exponential growth ahead. I also like the nice and juicy dividends that STE pays 4 times a year while waiting for capital growth.
Go Long Go Strong Go ST Engineering! ๐๐๐๐๐๐๐๐๐๐ฐ๐ฐ๐ฐ๐ธ๐ฌ๐ธ๐ฌ๐ธ๐ฌ
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Hope that mkt sentiment will turn much better soon. Very lousy STI today. Sad. [Cry]
Great article ๐๐ป๐๐ป๐๐ป
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