Broker Name: CGS International
Date of Report: November 13, 2025
Excerpt from CGS International report.
Report Summary
- ST Engineering (STE) is preparing strategic options for its loss-making iDirect Satcom unit, including possible divestment, after recording a significant S\$667m non-cash impairment. This move could improve USS division margins and save over S\$89m in annual EBIT losses.
- STE’s defence and public sector order wins are accelerating, with international contracts as key near-term catalysts. The order book stands at S\$32.8bn, supporting earnings growth. The report upgrades STE to “Add” with a target price of S\$9.50.
- STE’s ESG score has improved to A-, reflecting progress in emissions reduction, renewable energy use, and corporate governance, making it attractive to sustainability-focused investors.
- Financial forecasts project steady revenue and profit growth through to 2027, bolstered by strong aerospace, defence, and urban solutions businesses. Key risks include slower order wins and industry disruptions.
- STE proposed a special dividend following divestment proceeds, with total FY25F dividends at S\$0.23 per share.
Above is an excerpt from a report by CGS International. Clients of CGS International can be the first to access the full report from the CGS International website: https://www.cgs-cimb.com/
