ST Engineering - CGS-CIMB Research 2023-02-24: Improving Outlook

ST Engineering - Improving Outlook

  • ST Engineering (SGX:S63)’s 2H22F net profit of S$255m (-9% h-o-h, -7% y-o-y) was in line with our expectations, with FY22 net profit of S$535m (-6% y-o-y) at 97%/96% of our and Bloomberg consensus full-year forecast. The results included S$20m Transcore integration costs, S$13m impairment loss, offset by tax credit from the divestment of VT Halter Marine US. See ST Engineering's announcement dated 24 Feb 2023.
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  • PFO of Hangar utilisation remains maxed out, and A320/330 PTF conversions are fully booked until 2026.
  • The new PTF programmes attained GP breakeven in 4Q22, and should reach EBIT breakeven by end-FY23F, sustaining margin improvement.
  • Urban Solutions and Satcom (USS) EBIT margin surprised positively at 4% in 2H22 (1H22: -1.6%), despite a ~S$20m integration charge and shortage in high-chip impacting its SATCOMS business. We attribute the strength to six-month contribution from Transcore and delivery of rail mobility projects.
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    Above is the excerpt from research report by CGS-CIMB.
    Clients of CGS-CIMB may access the full report in PDF @

    LIM Siew Khee CGS-CIMB Research | Kenneth TAN CGS-CIMB Research | 2023-02-24

    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 5 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 Dividends & Corporate Actions,
    ST Engineering News Articles

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