With these new orders, the company's total contracts won for the first nine months of the year of some $14.1 billion has exceeded the full year total of $12.5 billion recorded in the preceding FY2024.
"ST Engineering remains a resilient growth play, underpinned by a record orderbook, with earnings strength supported by the defence and aerospace divisions and a recovery in satcom. We see upside risks to our estimates as our 2029 forecasts remain below management’s targets," says Jaiswal, who continues to rate this stock as "buy" in his Oct 24 note, along with a target price of $9.10.
The company's commercial aerospace (CA) segment won $D1.4 billion in new contracts, an increase of 87% y-o-y but down 7% q-o-q, reflecting broad-based strength across MRO and aerostructures & systems.
Key wins include a multi-year A380 heavy maintenance and cabin modification contract with a European airline, sustained demand in engine and component MRO, and strong A&S orders for engine nacelles and composite floor panels amid higher aircraft production.
The freighter conversion business also gained momentum with a new A330 passenger-to-freighter (P2F) order, underscoring healthy post-pandemic recovery and strong customer confidence in STE’s aerospace capabilities.
ST Engineering's urban solutions & satcom (USS) segment won $1.1 billion in new orders, an increase of 17% y-o-y but down 35% q-o-q, thanks to steady demand in mobility, smart infrastructure, and satcom.
The urban solutions sub-segment won contracts for rail electronics, transport systems, and tolling solutions in Singapore and the US; the smart utilities & infrastructure secured healthcare ICT and security management projects in Hong Kong and Singapore.
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Satcom, meanwhile, expanded globally with ground infrastructure contracts across Asia, Europe, the Middle East, and the US, with heightened geopolitical tensions an underlying driver.
The big winner is the company's defence & public security (DPS), which hauled in $2.4 billion in new contracts, a surge of 408% y-o-y and 60% q-o-q. New orders poured in across the sub-segments of digital systems & cyber, land systems, marine, and defence aerospace.
Wins include earth observation satellites, AI-powered 5G edge and cybersecurity systems, and next-gen broadband and satellite analytics projects.
The company booked its first 155mm ammunition orders from South America, as well as new Eastern European contracts. It won hybrid electric 4x4 vehicle orders from an Asian customer.
Its marine unit, together with Siemens Energy, will build a floating power barge for the Dominican Republic, while defence aerospace secured military aircraft MRO work.
"This was one of DPS’s strongest quarters, second only to 1Q25, driven by diversified defence and digital programmes," says Jaiswal.
ST Engineering shares, as at 2.40 pm, changed hands at $8.57, down 0.12%.
