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Our 2026 picks: ST Engineering — New products and contracts drive share price to a new high

The Edge Singapore
The Edge Singapore  • 4 min read
Our 2026 picks: ST Engineering — New products and contracts drive share price to a new high
Besides selling weapons, ST Engineering is actively marketing commercial products such as the AGIL Secure FastPass security clearance system / Photo: ST Engineering
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A recent headline describing the Terrex contract announced by Singapore Technologies Engineering (ST Engineering) as a “win” prompted some readers of The Edge Singapore to take issue. Evidently, they are of the view that “win” is the wrong adjective, given how there is no competition for many of its contracts to begin with, as it is almost the “exclusive contractor” for the Singapore government.

The perception is not without grounds. For decades, ST Engineering, in one form or another, has been the key defence and security contractor deemed essential to Singapore’s functioning as an independent country.

There are, of course, counterarguments to this point. For example, in 2023, the Colt Infantry Automatic Rifle 6940, under Czech company Colt CZ Group, was chosen by the army to replace the Ultimax 100, in use for some four decades, as the new section assault weapon. Presumably, ST Engineering offered an upgraded variant, but it was not chosen.

In the whole scheme of things, the presumed loss of this contract has not hurt the company’s fortunes terribly — certainly not when seen in the share price, which has more than doubled in the past year to more than $10, valuing the company at a record $31 billion.

With almost all pistons firing, ST Engineering has been securing a growing order book. From $13.1 billion in FY2022, the number increased to $14.8 billion the following year, but dipped to $12.6 billion in 2024. On Jan 28, it announced total new orders worth $18.7 billion for FY2025 ended Dec 31, 2025, a 49% y-o-y jump, bringing its total order book to $32.6 billion. This would keep its workshops and yards busy, prompting analysts to revise their target prices and maintain their “buy” calls.

For the company, arms sales helped, including the Terrex contract for the army, a new class of multi-role combat vessels for the navy, and renewed demand for 155mm artillery shells and 40mm grenades from overseas customers. However, its commercial sales prowess is not to be sniffed at too. Around this period, the company signed or extended new maintenance or retrofitting contracts with multiple airlines, as well as for its tolling system. Even its satellite business, which has struggled for years to turn around and recorded an impairment of $667 million in 3QFY2025, saw some new wins as well.

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As usual, ST Engineering was the anchor exhibitor at the recent Singapore Airshow 2026, a biennial spectacle that wows families and enthusiasts with flying displays, but for the business community, it was a showcase of the wares. The company, as per tradition, took up the largest floor space and dozens of ST Engineering employees were on site to showcase their products — and help keep the sales momentum going.

One key highlight from the company was its AGIL Secure FastPass, described as a system that provides a fully integrated, contactless airport traveller experience from check-in to boarding. According to ST Engineering, this system, built around the AGIL Secure security management and identity platform, combines advanced biometrics, AI, and unified security management and “ensures safety, efficiency and convenience at scale”.

The AGIL Secure FastPass comprises several key “components”: the FastPass Mobile App, which pre-loads travellers’ biometric identities and verified boarding passes to enable automated authentication and quick clearance; the FastPass Biometric e-Gate, which detects and verifies biometric identities at immigration lanes, enabling passport-free, contact-free and frictionless immigration clearance. There are also AI-enabled features, such as a scanning system that can detect dangerous and restricted goods with up to 95% accuracy.

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Presumably, this will be a system used to interest airport officials seeking to fit out Changi Airport’s massive Terminal 5 and numerous other airport upgrades across the region. Sales had already been made to the likes of Indonesia’s Dhoho Kediri International Airport.

Other products on display include drone-related items such as the Axios, which is mounted below drones to carry munitions, spare parts, rations, and other materials required for public security or close combat operations. There is also the DrN-600, a next-generation unmanned aircraft system for medium-lift air cargo delivery, and Gemini-X, a next-generation airborne tactical datalink system that connects aircraft systems with ground command-and-control networks.

The airshow takes place every two years, but the sales efforts run year-round. If the stream of new products can continue, so will the new contracts.

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