DMG & Partners, Oct 10
ST Engineering (STE) has announced that its electronics arm, ST Electronics has secured S$416 million of contracts for rail electronics, satellite communications and communications projects in Q3 2013. Out of this, about S$238 million was for communications and electronics systems, advance IT systems and rail electronics solutions, while S$178 million was for satcoms products and broadband communications solutions. STE's orderbook stood at S$12.7 billion as at end-June 2013, out of which about S$2.8 billion is expected to be delivered in H2 2013. We estimate the new contracts lifted net order book to S$13.1 billion, equivalent to 2x annual revenue. We have a "buy" on ST Engineering with a DCF (discounted cash flow) derived TP of S$4.70. We like STE for its solid fundamentals: 31 per cent ROE, 10-year EPS CAGR (compounded annual growth rate) of 5 per cent, and 4.2 per cent yield. STE currently trades at 20.7x FY13 PE, below its historical peak of 24.5x.
BUY
No comments:
Post a Comment