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ST Engineering
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ST Engg
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MrBear12
Supreme |
19-Aug-2025 13:18
Yells: "Cast all our anxieties on Jesus for He cares for us" |
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Bear thinks that was a very risky investment that turned a net cash company into a net debt one. The market also thought so because it initially sold off STEng.
However, STEng seems to have carried the debt load very well and turned in greater profits. So even if there is impairment of goodwill, that will be taken off in the large goodwill that the company currently enjoys. This is a strategic company with assets that cannot simply be monetised over a couple of years. Its true value is in the intangibles. Much like SCI which handles a strategic asset, namely water. STeng handles weapons for our defence. Can you trade this away just for a couple of dollars?
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alexvar
Senior |
19-Aug-2025 13:09
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True, you can speculate on the share price in the short term. The war craze, etc. What do you think about their US TransCore $3.6B acquisition in 2022? The USS segment still can' t generate meaningful EBIT 3 years later, despite this collosal acquisition. I think huge goodwill impairment is due. |
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MrBear12
Supreme |
19-Aug-2025 13:05
Yells: "Cast all our anxieties on Jesus for He cares for us" |
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That net income cannot cover both Capex and dividend is true but not relevant to whether or not STeng can sustain its dividend.
For years STEng dividend cover has been about 1.1. This means its net income covers their dividend payments with a surplus of 10 percent of net income to add to retained profits.
How to pay for capex? Borrow lah...
As long as you can pay the interest, you shld be okay. STEng has been able to pay its debts on time, so the business sustains.
This is a ten bagger (from inception)
Looking forward to 10 dollars and above, like SGX.
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alexvar
Senior |
19-Aug-2025 12:46
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Thanks for confirming my statement that net income can' t cover both CapEx and dividend payouts. STE has a garbaga balance sheet with massive useless goodwill balance and huge debt load. No wonder STE started selling off their profitable businesses to pay down their huge debt. $3.6B TransCore acquisition in 2022 destroyed their balance sheet, and made it over-indebted. overpaying for useless business under USS segment, which can' t generate any meaningful profit, sad $12m in EBIT in H1 2025. 30-June-2025 balance sheet: total shareholder equity: 2,714,625,000 intangibles (goodwill, etc): 4,514,124,000 net tangible book value: NEGATIVE SGD $1.8B Good luck holding STE ) DYODD
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MrBear12
Supreme |
19-Aug-2025 12:34
Yells: "Cast all our anxieties on Jesus for He cares for us" |
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Don't mislead here lah.
It's not net profit minus dividend and capital expenditures. What we look at is net operating cash flows minus all other cash flows (incl dividend and cap ex ) If the company is generating enough cash from operations to pay for dividends, repay debts and spend on stuff, then we are okay. Otherwise we have to borrow. If STeng has been repaying debt, it means it has generated enough cash from operations. So STEng is financially healthy. Maintain buy with price target above 10
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alexvar
Senior |
19-Aug-2025 12:26
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So cynical to want more wars to drive STE share price craze. WTH. STE shares are doomed. Its net income is not even enough to cover the CapEx and dividend payouts. H1 2025 net profit: 414m dividend payout: 281m Capital expenditures: 421m net profit-dividend payout-Capex = 287m deficit. STE net profit barely cover its Capex, no money left to pay dividends. DYODD. |
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Louistan
Senior |
19-Aug-2025 11:55
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Better pray that Trump fails in his attempt to bring peace in Ukraine, because if he does, lots of the proclaimed increased in spending by Nato coutries will be reversed. We would have seen the peak of defence equipment contracts for STE for the next few years.
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MrBear12
Supreme |
19-Aug-2025 11:30
Yells: "Cast all our anxieties on Jesus for He cares for us" |
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No it cannot stop the slide.
800 is first support. With more SBB, shortists will be more cautious. Trade with care
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alexvar
Senior |
19-Aug-2025 10:59
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LOL, laugh away. Even the share repurchases by STE can' t seem to stop the onoing price slide !
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JurongW
Elite |
18-Aug-2025 21:12
Yells: "Earnings give weight, Chart give wings" |
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Another 500,000 shares bought today at 8.03 to 8.20 ($4,079,879)
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MrBear12
Supreme |
18-Aug-2025 19:06
Yells: "Cast all our anxieties on Jesus for He cares for us" |
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Too many bears about. Tmr, we hope they clear out. Like for many other counters, very high selling pressure right from the start. Stand firm and let nothing shake us.
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JurongW
Elite |
18-Aug-2025 16:25
Yells: "Earnings give weight, Chart give wings" |
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Couldn' t fly today, still in correction mode found good support near $8 today.
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papercut111
Member |
18-Aug-2025 10:23
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Quite funny to see you replying to your own posts.
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alexvar
Senior |
18-Aug-2025 10:09
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chickens are coming home to roost. STE has to answer for its expensive but useless $3.6B acquisition. the USS segments EBIT is flat. what a disaster!
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MrBear12
Supreme |
17-Aug-2025 14:17
Yells: "Cast all our anxieties on Jesus for He cares for us" |
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If don't fly tomorrow, it'll fly the day following Fly and fly sky high | ||||
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dontbetray
Master |
17-Aug-2025 12:37
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If Putin didn' t say golden words " see you in Moscow" to trump , st Eng may fly tmr. Dydd |
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JurongW
Elite |
16-Aug-2025 16:36
Yells: "Earnings give weight, Chart give wings" |
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Share price should be rangebound for now as most analyst target price is $8 plus. Resistance at $9.
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Joelton
Supreme |
16-Aug-2025 12:18
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Analysts raise ST Engineering price targets after strong H1 net profit, cost-cutting efforts
The new price targets for ST Engineering range from S$8.10 to S$9.10
[SINGAPORE] The price target for ST Engineering : S63 +0.71% was raised by multiple analysts on Friday (Aug 15) after it reported a strong financial performance in the first half of 2025.
CGS International&rsquo s Lim Siew Khee raised her price target to S$8.70 from S$8.40 RHB analyst Shekhar Jaiswal upped his to S$9.10 from S$8.70.
Morningstar&rsquo s Lorraine Tan, director of equity research for Asia, raised the engineering group&rsquo s fair-value estimate by 21 per cent to S$8.10.
On Thursday, the company reported a 19.7 per cent rise in net profit to S$402.8 million for the first half of 2025, up from S$336.5 million in the corresponding period of the year before.
This was driven largely by revenue growth from its commercial aerospace as well as its defence and public security business segments, despite drag from the US tariffs and foreign currency exchange.
The counter dropped 6.3 per cent to S$8.40 at the close on Thursday, with 13.3 million shares having changed hands. It had closed at an all-time high the previous day at S$8.96. Tan had said that the drop could be due to &ldquo overheated sentiment in the defence sector&rdquo .
RHB&rsquo s Jaiswal said that ST Engineering&rsquo s defence and public security margins exceeded expectations. He added that a record-high order book and solid revenue visibility, underpinned by growth in the commercial aerospace and defence and public security units, expanding international defence orders and minimal exposure to the US trade tariffs, reinforced the investment case in its stock.
The limited impact of US tariffs on ST Engineering was also flagged as a positive by Lim, who pointed out that the group had maintained plans to not absorb its suppliers&rsquo tariff costs unless it was able to pass through such costs.
The group had previously stated it would be deferring some revenue to avoid Chinese tariffs on engine parts from the US at its facility in Xiamen. However, those deferrals were less than expected, at S$34 million for the second quarter, from its previous less-precise estimate of under S$40 million a month. This was flagged as another positive sign by Lim.
ST Engineering also opened a new maintenance and repair operations facility in Ezhou, in China&rsquo s Hubei province, on Aug 11, under its joint venture with SF Airlines, a Chinese cargo airline owned by SF Express, a logistics company.
CGS International&rsquo s Lim and Morningstar&rsquo s Tan lauded the group&rsquo s efforts at cost-cutting: it had slashed S$100 million in costs in the first quarter of 2025 alone. Tan said Morningstar had &ldquo underestimated STE&rsquo s ability to lower costs this quickly&rdquo .
&ldquo We believe the market will reward STE for hiving off low-margin/loss-making businesses,&rdquo said Lim.
Tan echoed the sentiment, adding that the company is on track to meet its S$1 billion cost-saving target through 2029.
However, CGS International downgraded ST Engineering to a &ldquo hold&rdquo on the back of it trading at three standard deviations above its historical average.
Lim said the market appears to have priced in the 2026 growth forecast of a 13 per cent growth in earnings per share. She also noted that the company faces some downside risk from slower order wins.
Tan suggested that the easing of growth in defence sales in the second half could have come from a strong base effect.
&ldquo We think the key risk remains STE&rsquo s ability to keep on the profitability path,&rdquo she said.
RHB kept its rating at &ldquo buy&rdquo , and raised its 2026-2027 earnings forecast by 3 to 4 per cent on sustained commercial aerospace and defence and public security margins, with the price target including a 4 per cent environmental, social and governance premium.
CGS International estimates a 2 to 5 per cent lift in earnings per share, based on lower financing costs and higher commercial aerospace segment margins.
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sfw2124
Senior |
15-Aug-2025 18:20
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Key TakeawayDespite robust 1H2025 results&mdash with revenue up 7% to S$5.92 billion and net profit up 20% to S$403 million&mdash the share price of ST Engineering plunged 6.3% on the day of the announcement due to a &ldquo sell‐ the‐ news&rdquo correction following a remarkable year‐ to‐ date rise of over 80%, combined with valuation concerns and &ldquo overheated sentiment&rdquo in the defence sector. Drivers of the Price Decline
Underlying Fundamentals Stay Intact
ConclusionThe sharp share-price decline on Aug 14, 2025, reflects market mechanics&mdash not a deterioration in business fundamentals. A significant YTD rally, coupled with high valuation and overheated sector sentiment, precipitated a sell‐ the‐ news pullback. For long-term investors, ST Engineering&rsquo s growth trajectory, strong order book, and resilient margins remain intact, presenting the recent dip as a potential accumulation opportunity.
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JurongW
Elite |
15-Aug-2025 18:01
Yells: "Earnings give weight, Chart give wings" |
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Another SBB today: 500,000 shares at $8.29 to $8.44 ($4.19 mil) | ||||
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