As such, Jaiswal is applying a higher valuation multiple on this counter, leading to a higher target price of $8.90 from $8.30.
On May 7, the company announced it won a contract from Singapore's Navy to deliver a suite of mine countermeasure (MCM) unmanned systems.
The MCM suite will include a fleet of unmanned surface vessels, autonomous underwater vehicles, and a command & control (C2) centre.
On the same day, ST Engineering announced the progression of the European Protected Waveform (EPW) project to its second phase.
The project aims to enhance secure satellite communications for military operations and critical government functions across Europe.
Additionally, Saab Australia and ST Engineering signed an agreement to deliver deployable health solutions for combat field hospitals in the Asia-Pacific.
Jaiswal points out that relative to regional peers, its year to date gain of around 70% has lagged. For example, Austal is up 106%; Hanwha Aerospace is up 170%; Korea
Aerospace is up 77%, and Hyundai Rotem is up 281%.
See also: DBS and OCBC raise TPs on SIAEC, see positive MRO growth
Excluding India and China defence names, these regional peers trade at around 30x 2FY P/E and 17.5x 2FY EV/EBITDA – both above ST Engineering’s current forward multiples, even though it matches their ebitda and net margins, and is better in its ROE and dividend yield.
ST Engineering shares changed hands at $7.92 as at 9.34 am, down 0.5%.
