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Aug 19 at 07:14 PM
$ST Engineering(S63.SG)
ST Engineering (S63): Defence Spending Meets Earnings Momentum
ST Engineering’s defence story is becoming harder to ignore. Management sees an S$11bn international defence pipeline over the next 18–20 months, spanning ammunition, counter/offensive-drone systems, armoured mobility, satellite-enabled battlefield awareness and resilient local supply chains.
The fundamentals are equally compelling. 1H26 net profit rose 27.1% to S$512.1m, with revenue growth and operating leverage from sustained cost savings. Its order book reached S$34.5bn at March 2026, providing substantial earnings visibility. (ST Engineering)
Technically, the setup remains constructive: the 200-day MA is around S$9.94, while MACD remains bullish. At roughly S$10.6–10.96, however, the stock is no longer cheap. FY26 estimates imply about 33x earnings, with Maybank’s S$12.50 target and consensus around S$11.58 offering further upside, but valuation leaves less room for disappointment. (TipRanks)
Verdict: HOLD / BUY ON PULLBACK. Existing investors should hold; new investors should accumulate in tranches around weakness rather than chase the defence rally.
Not financial advice.
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