Besides Australia, TransCore’s express lane tolling operations on an 18-mile stretch of Interstate 80 in Solano County, California went live on Dec 17. This is the fourth express lane corridor TransCore has delivered for the Bay Area Infrastructure Financing Authority since 2017.
In addition, ST Engineering was awarded two electric bus contracts from the Land Transport Authority (LTA) on Dec 15. LTA handed out a total of six contracts for 660 new electric buses. ST Engineering will be supplying 100 electric single-deck buses (for $35.7 million) and 150 electric double-deck buses (for $79 million). The remaining four contracts were given to BYD (Singapore), Cycle & Carriage Automotive and Yutong International Trade.
“These orders reinforce its tech leadership and international expansion. A record orderbook, improving balance sheet, and upside from international defence contracts supports our positive outlook,” says Jaiswal in his Dec 19 note.
Jaiswal last raised his target price to $9.40 from $9.10 on Nov 17. RHB’s target price is calculated using an average of forward PE, EV/EBITDA and discounted cash flow based on of adjusted free cash flow.
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ST Engineering’s outlook remains robust and its “record” $32.6 billion orderbook will provide about three years of revenue visibility, says Jaiswal. He expects the company’s net gearing to fall to 81% by the end of FY27F, down from 183% in FY24. The restructuring of its aviation asset management arm into a fund platform could lift the engineering group’s assets under management to US$3.5 billion by 2029.
“Upside should still stem from stronger international defence orders and lower interest costs, with risks centred on aerospace recovery, margins, delivery delays, and acquisitions,” Jaiswal adds.
As at 10.50 am, ST Engineering shares gained 1.96% to trade at $8.34 and is up 79.40% year to date.
