- ST Engineering (SGX:S63)’s 1Q24 revenue rose 18% y-o-y, led by double-digit growth in the commercial aerospace and defence, and public security businesses.
Growing order book and top line
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- Overall, there was a steady pace of execution, which should result in a forecasted ~15% EPS CAGR and ~5% dividend yield.
- Maintain BUY on ST Engineering with a higher DCF-based target price of S$4.30.
Aerospace and defence underpin growth
- ST Engineering reported 1Q24 revenue of S$2.703b, +18% y-o-y. This was driven by 32% growth in commercial aerospace (CA) revenue to S$1.152b (+8% q-o-q) and 14% growth in defence and public security (DPS) revenue to S$1.123b (-3% q-o-q). Revenue from the Urban Solutions and SATCOM (USS) business was -1% y-o-y.
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- DPS registered growth in all sub-segments.
- USS revenue was hindered by the ongoing SATCOM business transformation. TransCore revenue grew above 10% y-o-y.
Strong order book,
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