ST Engineering - CGS-CIMB Research 2023-02-08: Tweaking Our Rate Assumptions

• We project ST Engineering (SGX:S63)'s 2H22F reported net profit at S$271m (-3% h-o-h, -1% y-o-y). Revenue is likely to be strong at S$4.7bn (+10% h-o-h, +17% y-o-y), driven largely by
  1. 6 months of contribution from TransCore, and
  2. - Read this at SGinvestors.io -
• However, we expect EPS growth to be weighed by higher interest expenses from ST Engineering’s short-term commercial paper (CP), which are most affected by rising interest rates.
• For Urban Solutions & Satcom (USS), integration and transaction costs continued to be incurred in 2H22. Satcom may take time to recover from higher cost of equipment due to long-lead time for purchases.
• See SGX Earnings Calendar – ST Engineering will report FY22 earnings on 24 Feb 2023.

Raising our FY23-24F interest rate assumptions further

• - Read this at SGinvestors.io -
• Our revised weighted average interest costs for FY23F are now at 3.5% (previously 2.9%).

China reopening is a bright spot for aerospace business

• Read more at SGinvestors.io.

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/.

Read also CGS-CIMB's most recent report:
2024-02-12 ST Engineering - Longer-term Growth Drivers Intact.

Previous report by CGS-CIMB:
2023-11-10 ST Engineering - Set For A Stronger FY24.

Price targets by 4 other brokers at ST Engineering Target Prices.

Listing of research reports at ST Engineering Analyst Reports.

Relevant links:
ST Engineering Share Price History,
ST Engineering Announcements,
ST Engineering Dividend Payout Dates & Corporate Actions,
ST Engineering News