ST Engineering: A Top Gainer on the SGX

ST Engineering (SGX:S63) was the top gainer on the Singapore Exchange (SGX) on Tuesday, with its share price surging to an all-time high following strong full-year results. The company's revenue grew more than 10%, and net profit rose 20% year-on-year, driven by higher aircraft maintenance work and stronger demand for defense and public security equipment. This impressive performance has caught the attention of investors and analysts alike, who are bullish on the company's prospects.

ST Engineering's strong financial performance can be attributed to several key factors. The company has been driving growth through improved utilization of its capital and a plan to contain costs. It has sold and continues to offload non-core activities to focus on areas that provide synergies to its key commercial aerospace, defense, and smart city activities. This strategic move has led to improved capital utilization and cost containment, contributing to the company's growth (Source: "ST Engineering is driving growth through improved utilization of its capital alongside a plan to contain costs").

The company's three key divisions—commercial aerospace, defense, and public security—saw solid growth in 2023. The aerospace revenue increased by 5% to $2.15 billion, while defense and public security revenue rose by 20% to $2.6 billion. This growth was driven by higher aircraft maintenance work due to increased global air travel and stronger demand for defense and public security equipment (Source: "ST Engineering's share price hit an all-time high following strong full-year results, with revenue growing more than 10% and net profit rising 20% year-on-year in 2024").

ST Engineering's expansion into international defense markets has also contributed to its growth. The company's defense business has accelerated faster than expected, driven by geopolitical tensions. The total addressable market for this segment is estimated at US$5 billion from 2022 to 2027. Management has indicated that there might be more updates, especially regarding Eastern Europe and the Middle East markets (Source: "ST Engineering: A Look Forward", CGS International, 2024).

The acquisition of US toll road services provider TransCore has opened up new revenue streams for st engineering. This deal has allowed the company to diversify its income sources and tap into the growing demand for intelligent transportation systems. The integration of TransCore's expertise in tolling and traffic management solutions has expanded st Engineering's order book and ensured future revenue streams (Source: ST Engineering Analysis, Maybank Research, 2024).



ST Engineering's strong financial performance has been reflected in its share price, which hit an all-time high following its strong full-year results in 2024. The company's revenue grew more than 10%, and net profit rose 20% year-on-year, driven by higher aircraft maintenance work and stronger demand for defense and public security equipment (Source: Weekly Market Review, March 4, 2025).

Analysts have praised ST Engineering's performance and remain bullish on the company's prospects. CGS International, in a report dated December 9, 2024, expects ST Engineering to experience three consecutive years of double-digit earnings growth by FY25, thanks to the execution of projects from its impressive order book. Maybank Research, in a report dated November 19, 2024, downgraded ST Engineering to a HOLD recommendation, citing a slowdown in order book growth and delays in the urban solutions and satellite communications (USS) business turnaround as key reasons. However, the report also highlights the company's strong order book and solid growth in key divisions, indicating that ST Engineering remains a robust entity in the aerospace and defense sectors.

In conclusion, ST Engineering's impressive financial performance, strategic focus on capital utilization and cost containment, expansion into international defense markets, and acquisition of TransCore have positioned the company as a top gainer on the sgx. With a strong order book, solid growth in key divisions, and an attractive dividend yield, ST Engineering is well-positioned for continued growth and success in the aerospace and defense sectors. Investors and analysts alike should keep a close eye on this company as it continues to make waves in the market.