ST Engineering - Phillip Securities 2024-05-14: All Engines Roaring, But Satellite No Signal

• ST Engineering (SGX:S63)'s 1Q24 revenue update was within our expectations at 25% of our FY24e. Revenue grew an impressive 18% y-o-y to S$2.7bn.
  • Around 2/3 of the growth was from commercial aerospace revenue that jumped 32% y-o-y to S$1.1bn. Rising aircraft flying hours, slower introduction of new engines, and increased capacity boosted revenue in aircraft MRO.
  • - Read this at SGinvestors.io -
  • Satellite operations is still looking to transition customers to its multi-orbit next-gen platform.
• 1Q24 ST Engineering's dividend was 4 cents unchanged.
• We expect revenue momentum and operating leverage to build up in the remaining quarters. We nudge our FY24e earnings forecast for ST Engineering by 3% to S$713mil.
• - Read this at SGinvestors.io -

The Positives

Aircraft MRO remains the growth driver.

• Commercial aerospace (CA) registered a 32% y-o-y jump in 1Q24 revenue to S$1.2bn. Growth was broad-based and led by aircraft MRO (Maintenance, Repair, and Overhaul).
• With longer flying hours, MRO work is rising on engines, airframes, and other components. Delays in aircraft deliveries will further push the lifecycle of the existing aircraft fleet.

Broad-based growth in defence and public security.

• Read more at SGinvestors.io.

Paul Chew Phillip Securities Research | https://www.stocksbnb.com/ 2024-05-14 SGinvestors.io

---