ST Engineering - CGS-CIMB Research 2023-11-10: Set For A Stronger FY24

ST Engineering - Set For A Stronger FY24

ST Engineering (SGX:S63) | SGinvestors.ioST Engineering (SGX:S63)
  • ST Engineering (SGX:S63) guided for weaker y-o-y FY23F USS EBIT. We expect margin rebound in FY24F on ramp-up of major projects and streamlined Satcom costs.

Decent revenue growth led by aerospace, while order wins tapered

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  • Commercial Aerospace (CA) revenue was the key driver (+27% y-o-y), while Urban Solutions & Satcom (USS) recorded slight y-o-y growth (+6% y-o-y).
  • 3Q23 order wins tapered to S$2.2bn (-53% q-o-q, -54% y-o-y), with all three segments seeing y-o-y declines.

Positive Aerospace trends; PTF on track to EBIT breakeven

  • Maintenance, repair, and overhaul (MRO) revenue grew y-o-y (amount undisclosed) in 3Q23, driven by both airframe and engine & component (E&C). Hangar utilisation is close to maxed out, while E&C shops’ utilisation saw q-o-q improvement to 85%.
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  • Expansion plans are on track, with:
    1. Guangzhou hangar commencing in 1Q24F, and
    2. Ezhou, Singapore, and Pensacola hangars commencing in 2025F.

Healthy DPS revenue growth, seeing good international demand

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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 | 2023-11-10

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

Price targets by 3 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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