ST Engineering - Maybank Research 2024-08-15: Good Execution

• ST Engineering (SGX:S63) reported 1H24 PATMI of S$336.5m, +10% h-o-h/+19.9% y-o-y. Growth was driven by mid-teens top-line growth and better margins.
• Barring SATCOM, other business segments saw healthy revenue growth of low to high teens.

Capitalising on strong order book

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• With healthy order book and continued cost controls, ST Engineering is on track to deliver mid-teens earnings growth over next 12 months while offering a mid-single digit yield.

Key business segments up, SATCOM work in progress

• ST Engineering's 1H24 group revenue of S$5.5b grew 5% h-o-h/14% y-o-y. Commercial Aerospace (CA) grew by 9% h-o-h/20% y-o-y on strong growth in aerospace MRO and aero structures & systems. Defence & Public Security (DPS) saw 11% h-o-h/12% y-o-y growth led by digital systems & cyber as well as marine. Urban Solution & SATCOM (USS) revenue was -13% h-o-h/+3% y-o-y as growth in urban solutions (which includes TransCore) was offset by weakness in SATCOM.
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Better margins

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Krishna Guha Maybank Research | https://www.maybank-ke.com.sg/ 2024-08-15 SGinvestors.io

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