That said, ST Engineering’s 1HFY2025 results were in line with Guha’s expectations with patmi for the six months to June 30, up by 19.7% y-o-y and 10% higher h-o-h to $402.8 million. Revenue was up by 7.2% y-o-y to $5.92 billion. To Guha, the group’s key items were in line with his forecasts while patmi had an annualised run-rate of 4% below his FY2025 estimates.
As at end-June, ST Engineering’s order book was $31.2 billion, 12% higher y-o-y, with gross seen across all three segments.
“Order visibility remains from ongoing increase in global defence spending. However, order lead-time for satcom is more extended,” says Guha.
Despite the downgrade, a lower weighted average cost of capital (WACC) has increased the analyst’s target price to $8.40 from $8.30 previously.
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The rest of Guha’s estimates remain unchanged with FY2025 core net profit still at $841 million and full-year revenue at $11.95 billion. The consensus has a FY2025 net profit estimate of $883 million.
As at 9.44am, shares in ST Engineering are trading 10 cents lower or 1.23% down at $8.04.
