Broker Name: OCBC Investment Research
Date of Report: 14 November 2025
Excerpt from OCBC Investment Research report.
Report Summary
- ST Engineering (STE) maintained strong growth in 3Q25, with revenue up 13% year-on-year driven by Commercial Aerospace, Defence & Public Security, and Urban Solutions & Satcom.
- The group secured SGD12.6b in new contracts in FY24, raising its order book to SGD28.5b and providing strong revenue visibility through 2026.
- STE declared an interim dividend of 4.0 Singapore cents and proposed a final and special dividend, potentially bringing FY25 DPS to 23.0 cents.
- Recent divestments generated SGD594m in cash, offset by a non-cash impairment of SGD689m in the satcom business, but core operations remain resilient.
- STE’s exposure to the multi-year defence upcycle, integrated aerospace solutions, and passenger-to-freighter conversions underpin its growth outlook.
- Key risks include potential margin pressures, oil price declines, and slower-than-expected aerospace recovery, but the company has disciplined capital management and a strong contract pipeline.
- The report raises STE’s fair value estimate to SGD9.80, reiterating a BUY rating based on robust order flow and earnings growth.
Above is an excerpt from a report by OCBC Investment Research. Clients of OCBC Investment Research can be the first to access the full report from the OCBC Investment Research website: https://www.ocbc.com/group/ocbc-investment-research
