ST Engineering: Update Shows Aerospace Recovery; Revenue on Track With Expectations

Singapore Technologies Engineering experienced a 29.5% year-on-year recovery in its first-quarter commercial aerospace activities that helped drive group revenue up 12.6% year on year. We believe STE is on track to meet our full-year 2023 revenue growth estimate of 11.3%. First-quarter revenue of SGD 2,289 million makes up 22.8% of our full-year estimate, in line with historical seasonal contribution. No profit details were provided. The main positive is the very strong orderbook wins during the period. This affirms our narrow moat rating. STE’s outstanding orderbook is now at SGD 25.4 billion, which implies solid revenue visibility through first-quarter 2025. We keep our fair value estimate at SGD 4.60 and we remain buyers of the shares.