ST Engineering - OCBC Investment 2023-08-11: Robust Order Book Of SGD27.7b

• ST Engineering (SGX:S63) reported a 14% y-o-y increase in revenue to S$4.9b in 1H22, but saw a flattish bottom-line of S$280.6m compared to a year ago.
• In 1H22, the Commercial Aerospace segment recorded a one-off pension restructuring gain of S$72m. Adjusting for this gain and other one-off items, group net profit on a base operating performance basis would be 26% higher y-o-y at S$300m, despite higher finance costs. This is generally in line with our expectations.

Segmental updates

• - Read this at SGinvestors.io -
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• more deliveries for various projects in 2H23 and;
• restructuring of Satcom segment resulting in cost savings.

Continues to secure new contracts

• In 2Q23, ST Engineering secured new contracts of about S$4.7b, bringing the total order book to S$27.7b. Of this order book figure, about S$4.4b is expected to be delivered in the remaining months of 2023.
• ST Engineering has declared a second interim dividend of S$0.04 per share, in line with our full year expectations of S$0.16 per share for FY23. See ST Engineering's dividend date.
• We maintain our fair value estimate of S$4.20 for ST Engineering.

ESG rating has remained constant over the past 5 years

• Read more at SGinvestors.io.

OCBC Research Team OCBC Investment Research | https://www.iocbc.com/ 2023-08-11 SGinvestors.io

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