ST Engineering shares hit all-time high, lifted by record earnings, order book

SINGAPORE – ST Engineering shares reached yet another record on Feb 28 after a string of new highs in recent weeks, with analysts saying the stock could head even higher if the company continues to perform well.

The shares closed up 3 per cent at $5.41 after the firm reported record revenue, earnings and order book levels on Feb 27.

Turnover came in at $11.28 billion for the 12 months to Dec 31, 2024 – 12 per cent up on the $10.1 billion recorded in 2023. Net profit surged as well, rising 20 per cent to $702 million compared with $586 million in the previous year.

Chief executive Vincent Chong told a results briefing on Feb 28 that the company has already met its 2026 revenue target, given current turnover levels.

All three of its business segments contributed to the bumper 2024 result, with its commercial aerospace division leading growth. The other two segments are defence and public security, and urban solutions and satellite communications.

The group secured $12.6 billion in new contracts across the businesses in 2024 – $4.3 billion came in the fourth quarter alone – and ended the year with orders at record levels of $28.5 billion. Around $8.8 billion worth of orders will be delivered in 2025.

Despite its stellar performance, ST Engineering’s board proposed a final dividend of five cents per share, up just one cent on 2023, to bring total dividends in 2024 to 17 cents. The dividend will be paid on May 15.

Mr Chong said the company maintains a balance between returning profits to shareholders and retaining funds to deploy as fresh capital for growth.

He also noted that growth in the coming months will centre on the commercial aerospace division. The shortage of plane-to-freighter conversion work is prompting the company to reallocate resources to aircraft maintenance. It will expand its hangar capacity for this purpose over the next few years.

This comes as demand to maintain and upkeep existing aircraft is rising amid a bottleneck in the delivery supply chain at plane makers Boeing and Airbus, which is forcing airlines to keep airliners in service for longer.

If ST Engineering continues to win orders and perform well, analysts see the stock’s value rising beyond its current peak within the next 12 months.

RHB analyst Shekar Jaiswal has the highest target price of $5.90 on the stock.

He noted that ST Engineering’s order book provides about three years of revenue visibility and makes up around 70 per cent of his 2025 revenue estimate.

He added that the firm’s international defence business, particularly in Europe, is expected to continue securing strong orders, while the increase in Singapore’s 2025 defence budget by 12.4 per cent to $23.4 billion should also bring benefits.