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MAYBANK KIM ENG |
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ST Engineering: Strong underlying operating performance Singapore Technologies Engineering (STE) delivered a 2.7% YoY rise in revenue to S$6.7b and a 1.7% fall in net profit to S$494m in FY18, compared to ours (S$532m) and the street’s (S$539m) expectations. Excluding one-off charges of S$32.6m, net profit would have been 9% up at S$527m, which would have been in line with our expectations. Underlying operating performance remained strong for the group. New contracts announced amount to about S$5.24b in FY18, bringing order book to S$13.2b, of which S$4.9b is expected to be delivered in FY19. Looking ahead, the Aerospace segment is likely to be occupied with the integration of MRAS this year upon completion of transaction. We fine tune our estimates and our FCFF-based FV rises slightly from S$3.95 to S$4.01. Current dividend yield is 4.0%.
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Integrating retail brokerage will improve cost income
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| CGS CIMB | PHILLIP SECURITIES |
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ST Engineering 4Q18 results: Fundamentals still positive
■ Marine unit delivered its 3rd consecutive quarter of profit growth on better shipbuilding profit, beating Singapore peers. Earnings visibility is strong. ■ Electronics posted its first double-digit PBT growth since FY13 without compromising PBT margin (c.10%). We see PBT margin sustaining in FY19F. ■ Management confident of completing MRAS acquisition by 1Q19. We bake in c.S$26m of aerospace profit in FY19F, assuming 2H19F MRAS contribution.
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Still resilient in face of adversity
SINGAPORE | REAL ESTATE | FY18 RESULTS (CHANGE OF ANALYST) 4Q18 and FY18 PATMI below our expectations, mainly due to impairment losses recorded. Robust demand for launched Singapore projects – including those launched after July 2018. Maintain ACCUMULATE with adjusted TP of S$11.82 (change of analyst).
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