ST Engineering - Defensive Giant In Trying Times
- ST Engineering (SGX:S63)'s 1Q22 revenue returned to pre-COVID-19 levels of S$2bn. Transcore acquisition bearing fruit with S$1.6bn addition to ST Engineering’s S$21.3bn order book.
- Active product redesign, supply chain management and some cost pass-through to customers mitigate inflationary and chip shortage pressures.
- Catalysts: quicker global border reopening and strong orders in digital/smart city.
- We cut FY22-24F earnings per share (EPS) forecast by 2-3% to factor in inflation and rising interest rates although ST Engineering sees minimal impact for now.
- Our blended valuations target price for ST Engineering is based on 20.7x FY23F P/E, DCF, and 4% dividend yield.
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
LIM Siew Khee CGS-CIMB Research | Kenneth TAN CGS-CIMB Research | https://www.cgs-cimb.com 2022-05-13 2022-05-13
Read also CGS-CIMB's most recent report:
2022-06-01 ST Engineering - NDR Takeaways: Growth & Yield
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