ST Engineering

[kennynah]

so...what's that got to do with ST Engineering being around?

[winston]

SINGAPORE TECHNOLOGIES ENGINEERING - J.P. Morgan upgraded ST Engineering to "overweight" and raised its December 2010 price target by 71 percent to S$3.50 from S$2.05, saying the weakness in the aerospace sector has not dampened the group's overall growth momentum.

[millionairemind]

November 3, 2009, 5.47 pm (Singapore time)

ST Engg's Q3 net profit falls 7%
By TEH SHI NING

Singapore Technologies Engineering's third quarter net profit fell 7 per cent to $120.3 million, from $128.9 million a year ago.

Group revenue also fell 2 per cent to $1.35 billion in the quarter which ended Sept 30, from $1.38 billion in the third quarter of last year.

Both its Aerospace and Land Systems sectors saw turnover fall from the third quarter of last year, while the Electronics and Marine sectors reported higher turnover, the group said.

Earnings per share fell 7 per cent to 4.01 cents in the quarter, compared to 4.31 cents for the third quarter of 2008.

'In 3Q2009, the Group continued to secure new commercial orders and also won several new contracts from governments around the world despite a challenging market,' said the group's president and CEO Tan Pheng Hock.

ST Engineering's order book stood at $10.3 billion at the end of September, and it expects $0.97 billion of this to be delivered in the last quarter of 2009.

Its cash and cash equivalents, and short-term investments totalled $1.64 billion as of Sept 30.

[winston]

SINGAPORE TECHNOLOGIES ENGINEERING - The company, more than 50 percent owned by Singapore state investor Temasek Holdings [TEM.UL], said on Tuesday its quarterly profit fell to S$120.3 million ($86.2 million) from S$128.9 million a year ago.

Despite the profit fall, Deutsche Bank continued to recommend investors to "buy" shares in the arms maker and raised its target price 8.3 percent to S$3.25/share, citing improving prospects in new orders.

Source: Reuters

[winston]

• ST Engineering today announced that its aerospace arm, ST Aerospace, has secured a US$90m (about S$125m) contract to provide airframe maintenance services for a major US airline.

With an additional option to extend for 2 more years, including the option, the total contract value is about US$170m (about S$236m).

Source: Phillips Securities

[winston]

Not vested. From DBS:-

ST Engineering’s recent MRO contract wins in US point to aviation market recovery, as well as growing 3rd party outsourcing.

DBS Research expects defence and infrastructure contract wins on the back of sustained government spending.

The group’s war chest of S$1.6bn points to potential acquisitions, and 100% dividend payout is likely again.

Maintain BUY, TP revised up to S$3.80 (Prev S$ 3.30).

[winston]

ST ENGINEERING - Singapore Technologies Engineering, the world's largest aircraft maintenance firm, posted a 27 percent rise in fourth-quarter net profit to S$129.7 million.


Source: Reuters

[ichew]

From UOBKH:

DOWNGRADE TO SELL
Current Price: S$3.19
Fair Price: S$2.75
(Previous: S$3.32)

Analyst
K Ajith
(65) 6590 6627
[email protected]

Results
FY09 pre-tax profit (PBT) was below ours and market expectation but net profit at S$443.9m was within market and our estimate. Dividend payout was
cut from 100% to 90% as a prudent measure on expectations of an uncertain economic environment and greater forex volatility. STE emphasised it does not repatriate cash from overseas due to withholding tax.

• Top-line was boosted by Marine (+3%) and Electronics (+20%) segments.
Higher shipbuilding revenue for the marine and rail infrastructure projects in China for the electronics segment accounted for the growth.

• PBT was flat with Aerospace segment dragging down earnings from the other segments. This was mainly due to lower margins on the aircraft
maintenance segment. Land systems division saw revenue declining 6%, but PBT rising 13% due to improved margins for the automotive
segment.

• A 116% increase in stock obsolescence in the Land Systems division also impacted Group PBT. This was due to provision for contracts that
were not delivered.

• FY09 also benefitted from S$39m in job credits and excluding that, PBT and net profit would have been negative.

• PBT was also impacted by higher interest charges from the US$500m notes issuance.

• Orderbook fell from S$10.6b to S$10.3b, but this excluded a US$500m letter of intent which would have raised orderbook to S$11b.

• JAL has indicated commitment towards payables but post restructuring, there is the risk of lower MRO works.

• Free cash flow rose 43% to S$448m, but net cash flow excluding funds from the bond issue and debt repayments was negative. This suggests
that the current modus operandi of high dividend payouts is unsustainable.

Valuation/Recommendation
This is the first time in 10 years that STE cuts its dividend payout from 100% to 90%, suggesting concerns over cash flow. We downgrade the stock to SELL and value the stock at S$2.75. This is derived by regressing 2-year average forward ROE and book value to historical average P/B multiples. At
S$2.75, the stock will be trading close to its mid-cycle PE multiple of 18.5x.

[winston]

Wonder what's the margin on this type of contract ?

SINGAPORE TECHNOLOGIES ENGINEERING Singapore's ST Engineering said on Wednesday its unit ST Aerospace has secured a $750 million engine maintenance contract from India's Jet Airways .

ST Engineering said ST Aerospace would provide maintenance and support for 67 Jet Airways' Boeing 737 aircraft over 10 years.


Source: Reuters

[millionairemind]

May 4, 2010, 5.35 pm (Singapore time)

STE's Q1 net profit up 9%, sees higher FY2010 turnover, PBT

By ANGELA TAN

SINGAPORE - ST Engineering reported on Tuesday that its net profit for the first quarter of 2010 rose 9 per cent to $92.82 million (US$67.63 million).

Turnover rose 3 per cent to S$1.36 billion, with commerical sales accounting for 60 per cent of the total. All sectors reported higher sales, except for its aerospace division.

The group's order book soared to a new high of $11.8 billion by end March 2010. About $3.2 billion of this order book is expected to be delivered in the remaining nine months of 2010.

STE expects to achieve a comparable turnover and higher profit before tax (PBT) for H1 2010 vis-a-vis H1 2009.

It expects, based on the order book and scheduled deliveries, to achieve higher turnover and PBT for FY2010 against FY2009.