ST Engineering is poised for growth as it capitalises on increasing global defence spending, according to a recent update from RHB.
The company, which has been expanding its capabilities in both conventional and digital defence, is expected to benefit from a diversified orderbook and international contract wins. Despite these strengths, its year-to-date share price gain has not kept pace with regional peers, presenting a potential opportunity for investors.
The company’s new target price has been set at $6.50 (SGD8.90), up from $6.05 (SGD8.30), reflecting a 12% upside. Analyst Shekhar Jaiswal highlighted that ST Engineering is trading below the regional peer average, excluding India and China, yet offers comparable margins, superior return on equity, and higher yields, estimated at around 2% for the financial year 2025 forecast.
ST Engineering’s international expansion is seen as a key driver for its balanced and resilient growth profile. The company is well-positioned to leverage the global surge in defence spending, which has been on the rise due to geopolitical tensions and increased national security budgets worldwide.
The update underscores the company’s solid fundamentals and its strategic positioning in the defence sector. As ST Engineering continues to secure international contracts, it is expected to enhance its market position and deliver value to shareholders. The company’s focus on both conventional and digital defence capabilities further strengthens its competitive edge in the global market.
Looking ahead, ST Engineering’s ability to capture international defence contracts and maintain a diversified orderbook will be crucial in sustaining its growth trajectory. The company’s performance will be closely watched by investors seeking exposure to the defence sector’s growth potential.
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