ST Engineering - OCBC Investment 2020-02-25: Continues To Deliver

SINGAPORE TECH ENGINEERING LTD (SGX:S63) | SGinvestors.io SINGAPORE TECH ENGINEERING LTD (SGX:S63)

ST Engineering - Continues To Deliver

  • Solid earnings with 17% rise.
  • Strong order book of S$15.3b.
  • Defensiveness amidst uncertainty.



17% rise in FY19 net profit

  • ST Engineering (SGX:S63) saw a 17% rise in revenue and a 17% increase in PATMI as well to S$578m in FY19, 4% higher than our forecast of S$554m.
  • On a segmental basis, net profit for Aerospace was up 10% to S$269m while Electronics was up 2% at S$191m. Net profit for Land Systems rose 46% to S$77m while Marine’s net profit grew 14% to S$52m. Net loss under “Others” narrowed to S$11m from -S$35m in FY18.


Growth in Smart City revenue –

  • Smart City revenue totaled S$1.4b in FY19, and was up 40%. This was largely centred around contributions from the Electronics business.
  • Management reiterated that the group is on track to reach S$2b per annum in Smart City revenues by 2022.


Continues to secure contracts

  • ST Engineering announced a total of S$1.5b new contracts in 4Q19, bringing the 2019 total to S$8b, including S$1b for a unit of Polar Security Cutter in the Marine division.


Change in quarterly reporting

  • Pursuant to the amendment of the SGX mainboard listing rules effective 7 Feb 2020, ST Engineering will publish its financial results on a half-yearly basis. The group will also augment its half-yearly results with relevant operating information on a quarterly basis.


ST Engineering a clear outperformer






OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2020-02-25
SGX Stock Analyst Report BUY MAINTAIN BUY 4.70 UP 4.640



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