- ST Engineering's 1Q25 revenue was within expectations at 23% of our FY25e forecast. Defence led the growth with an 18% y-o-y rise to S$1.3bn. Limited financials were provided in the 1Q25 update.
- - Read this at SGinvestors.io -
- On tariffs, the first-order financial impact is immaterial. Engine MRO work conducted in China does import parts from the US. ST Engineering will not absorb the cost of the 125% duties on such parts. Any cancellation of such business could impact revenue of S$40mil per month.
- We view the banning of US-made aircraft parts from entering China as only raising the risk of grounding the local airline fleet.
The Positive
Strength in DPS revenue and new orders.
- - Read this at SGinvestors.io -
- In digital business, there were orders from GPU data centre infrastructure and AI-related projects such as command and control, training, and defence products.
The Negative
PTF drag for CA.
- Read more at SGinvestors.io.
