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ST Engineering (SGX:S63)'s 1Q26 revenue rose 11% y-o-y to S$3.26bn, or +15% y-o-y rebased excluding LeeBoy’s 1Q25 contribution, broadly in-line at 23.8% of street FY26 estimates.
1Q26 broadly met expectations.
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Commercial Aerospace revenue rose 15% y-o-y to S$1.32bn, driven by engine MRO and nacelle deliveries.
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Urban Solutions & Satcom revenue grew 18% y-o-y to S$525mil, supported by >15% Urban Solutions growth and >30% Satcom growth.
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New contract wins reached S$4.8bn in 1Q26, lifting orderbook to a new record of S$34.5bn from S$33.2bn in the previous quarter, with management guiding S$8.0bn of orderbook deliveries over the remainder of 2026.
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Outlook remains constructive despite geopolitical uncertainties.
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The S$8.0bn remaining delivery guidance implies a slower ~9% y-o-y growth cadence versus ~12.5% in 4Q25, but we would not overread this given the higher delivery base and because the guidance likely factors in management’s current assessment of the Middle East conflict. Direct Middle East conflict impact remains immaterial, with revenue exposure at < 3%, minimal project delays and energy cost protection through hedging and pass-throughs, while second-order impact has also been limited so far with passenger capacity still resilient among ex-Middle East carriers.
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More importantly, international defence momentum remains strong, with ST Engineering already securing S$1.07bn of contracts as of Apr-26, close to its S$1.2bn FY26 target, while still pursuing a broad pipeline across land systems, naval platforms, ammunition, unmanned systems, satellites and digital defence.
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Commercial Aerospace also continues to benefit from scarce hangar and engine slots, as new-generation engine MRO demand increasingly starts to ramp, with airlines thus far still reluctant to give up secured maintenance slots.
Urban Solutions supported by robust orderbook
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