{"id":17565,"date":"2024-08-02T07:00:20","date_gmt":"2024-08-01T23:00:20","guid":{"rendered":"https:\/\/www.smallcapasia.com\/?p=17565"},"modified":"2026-06-08T19:29:27","modified_gmt":"2026-06-08T11:29:27","slug":"singapore-technologies-engineering-strong-1q24-revenue","status":"publish","type":"post","link":"https:\/\/www.smallcapasia.com\/zh-hans\/singapore-technologies-engineering-strong-1q24-revenue\/","title":{"rendered":"Singapore Technologies Engineering &#8211;  Strong 1Q24 Revenue"},"content":{"rendered":"<p><em>Excerpts from UOBKayHian report<\/em><\/p>\n<h2>Singapore Technologies Engineering (SGX: S63)<\/h2>\n<ul>\n<li>Singapore Technologies Engineering (STE) 1Q24 revenue of S$2.70b is in line, accounting for 24.6% of our full-year projection.<\/li>\n<li>Group revenue rose 18% yoy, driven by strong revenue growth in CA (+32%, backed by strong demand) and DPS (+14%). USS posted yoy marginally lower revenue due to project timing.<\/li>\n<li>A strong orderbook of S$27.7b as of end-1Q24 provides good revenue visibility in the medium term.<\/li>\n<\/ul>\n<p>Maintain BUY on STE for its strong organic core earnings growth (2024-26 CAGR: 10.2%). Target price: S$4.50<\/p>\n<h2>1Q24 business update; revenue in line<\/h2>\n<p>STE 1Q24 revenue of S$2.70b (+18% yoy) is in line with our expectations at 24.6% of our full year forecast.<\/p>\n<ul>\n<li>Commercial aerospace (CA): 1Q24 CA revenue of S$1.15b (+32% yoy) came in slightly stronger than our expectations, at 27.4% of our full-year forecast. The CA revenue growth was driven by broad-based revenue growth across different sub-segments. According to management, the CA division is firing on all cylinders (MRO, P2F, Nacelle manufacturing) and its capacity is close to being optimally utilised.<\/li>\n<li>Defence &amp; public security (DPS): 1Q24 DPS revenue of S$1.12b (+14% yoy) is in line with our expectations, at 24.2% of our full-year forecast. The DPS revenue growth was also driven by growth in all sub-segments.<\/li>\n<li>Urban solutions &amp; satcom (USS): 1Q24 USS revenue of S$429m (-1%) is slightly behind our projections, at 20.0% of our full-year forecast. STE noted that TransCore has registered over 10% yoy growth in 1Q24, but the Urban Solutions base business revenue will be more 2H weighted. Satcom business remains under transformation, which has been progressing well, according to management.<\/li>\n<\/ul>\n<h2>Orderbook standing at a record high<\/h2>\n<p>STE\u2019s orderbook stood at S$27.7b at end-1Q24 (4Q23: S$27.4b), matching the previous record-high levels at end-2Q23.<\/p>\n<p>During the quarter, STE secured S$3.0b worth of new contracts, contributed by healthy contract wins across all three segments (CA: S$0.84b, DPS: S$1.65b, USS: S$0.54b).<\/p>\n<p>STE guided for S$6.5b worth of contracts to be delivered in the rest of 2024; this is 12% higher than S$5.8b contract delivery guidance a year ago for Apr-Dec 23.<\/p>\n<h2>On track to hit record levels of revenue and net profit in 2024<\/h2>\n<p>With the strong orderbook and STE\u2019s guided yoy higher orderbook conversion to revenue, we maintain our expectations that STE will achieve record-high levels of annual revenue at S$11b in 2024 (+8.9% yoy).<\/p>\n<p>This means that STE will hit its 2026 revenue target (communicated in its 2021 corporate strategy) two years in advance. We forecast STE\u2019s core net profit to grow 15.6% yoy to S$641m in 2024.<\/p>\n<p>The faster growth in core net profit than revenue is explained by our projected slightly better overall operating margins for the group in 2024 at 8.5% (2023: 8.4%), backed by largely stable\/improving operating margins of individual business segments.<\/p>\n<h2>Valuation\/Recommendation<\/h2>\n<p>Maintain BUY and target price of S$4.50. Our target price is based on 7.75% WACC and 2.5% terminal growth assumptions. STE currently trades at 18.1x 2025F PE, 1.7SD below its historical one-year forward mean PE of 21.7x.<\/p>\n<p>Our target price implies a 20.2x 2025F PE, 0.7SD below the historical one-year forward mean.<\/p>\n<figure id=\"attachment_17567\" aria-describedby=\"caption-attachment-17567\" style=\"width: 1527px\" class=\"wp-caption alignnone\"><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/08\/st-engineering-share-price-chart.jpg\"><img fetchpriority=\"high\" decoding=\"async\" class=\"size-full wp-image-17567\" src=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/08\/st-engineering-share-price-chart.jpg\" alt=\"Singapore Technologies Engineering\" width=\"1527\" height=\"483\" \/><\/a><figcaption id=\"caption-attachment-17567\" class=\"wp-caption-text\">Singapore Technologies Engineering share price chart<\/figcaption><\/figure>\n<p>You can find the full report <em><a href=\"https:\/\/www.smallcapasia.com\/wp-content\/uploads\/2024\/08\/Singapore_Tech_Engineering.pdf\">here<\/a> <\/em>and the company website <em><a href=\"https:\/\/www.stengg.com\/en\/investor-relations\" target=\"_blank\" rel=\"noopener noreferrer nofollow\">here<\/a><\/em>.<\/p>\n<p>[thrive_leads id=&#8217;15712&#8242;]<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Excerpts from UOBKayHian report Singapore Technologies Engineering (SGX: S63) Singapore Technologies Engineering (STE) 1Q24 revenue of S$2.70b is in line, accounting for 24.6% of our full-year projection. Group revenue rose 18% yoy, driven by strong revenue growth in CA (+32%, backed by strong demand) and DPS (+14%). USS posted yoy marginally lower revenue due to [&hellip;]<\/p>\n","protected":false},"author":36,"featured_media":17572,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[3052,3051],"tags":[881,1331,1943,2774,2854,2855,2856],"class_list":["post-17565","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-exchange-listed-companies-singapore","category-singapore","tag-singapore-stocks","tag-singapore-stocks-to-buy","tag-singapore-stocks-ideas","tag-singapore-technologies-engineering","tag-singapore-technologies-engineering-share-price-chart","tag-aerospace-stocks","tag-defence-stocks"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17565","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/users\/36"}],"replies":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/comments?post=17565"}],"version-history":[{"count":4,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17565\/revisions"}],"predecessor-version":[{"id":17573,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/posts\/17565\/revisions\/17573"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/media\/17572"}],"wp:attachment":[{"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/media?parent=17565"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/categories?post=17565"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.smallcapasia.com\/zh-hans\/wp-json\/wp\/v2\/tags?post=17565"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}