ST Engineering

[Perisher]

9 July 2015 ST Engineering clinches several aerospace contracts worth $920 million

SINGAPORE (July 9): Singapore Technologies Engineering has clinched several aerospace contracts worth $920 million in the second quarter this year.

The new orders involve projects ranging from airframe, component and engine maintenance, to engine wash and pilot training, the engineering services provider told the stock exchange in a statement.

ST Engineering secured a maintenance-by-the-hour contract from Flybe and an engine maintenance contract from Jet Airways.

It also secured a heavy maintenance agreement for six Airbus A319 aircraft belonging to an international airline.

For component support, it won several Boeing 737NG landing gear overhaul and exchange contracts for airline operators in Asia and Oceania.

In terms of engine support, an agreement was inked for the heavy maintenance of six CFM56-7B engines for a low-cost carrier in Southeast Asia.

ST Engineering also secured multiple contracts with customers in Asia Pacific, Europe and the US for EcoPower engine wash services.

It signed a three-year pilot training contract with Tigerair Singapore for the provision of simulator training services.

ST Engineering said the contract wins are not expected to have any material impact on its consolidated net tangible assets per share and earnings per share in the current financial year.

ST Engineering ended down 1 cent or 0.3% to $3.26, giving it a market capitalisation of $10.14 billion.

 

[Keverus]

9 July 2015 ST Engineering clinches several aerospace contracts worth $920 million

SINGAPORE (July 9): Singapore Technologies Engineering has clinched several aerospace contracts worth $920 million in the second quarter this year.

The new orders involve projects ranging from airframe, component and engine maintenance, to engine wash and pilot training, the engineering services provider told the stock exchange in a statement.

ST Engineering secured a maintenance-by-the-hour contract from Flybe and an engine maintenance contract from Jet Airways.

It also secured a heavy maintenance agreement for six Airbus A319 aircraft belonging to an international airline.

For component support, it won several Boeing 737NG landing gear overhaul and exchange contracts for airline operators in Asia and Oceania.

In terms of engine support, an agreement was inked for the heavy maintenance of six CFM56-7B engines for a low-cost carrier in Southeast Asia.

ST Engineering also secured multiple contracts with customers in Asia Pacific, Europe and the US for EcoPower engine wash services.

It signed a three-year pilot training contract with Tigerair Singapore for the provision of simulator training services.

ST Engineering said the contract wins are not expected to have any material impact on its consolidated net tangible assets per share and earnings per share in the current financial year.

ST Engineering ended down 1 cent or 0.3% to $3.26, giving it a market capitalisation of $10.14 billion.

bro, posted already. i only got one thing to say...ST Eng has been winning alot of contracts over the years. but has this helped the share pricE?

 

[Keverus]

Ok, then challenge me in TA. Why not states your probability? Can? Before you mention rubbish? Let's the results so the final judgement? Seem like you having some EQ problems.

you're the TA master la..dont bully ppl

 

[Perisher]

That news certainly had an impact on ST engineering's price, not forgetting the overall market also did. If it doesn't break the 3.2 level which is a support since mid 2012, it should rebound.

'FEB 27, 2015 news.
ST Engineering on Friday reported a 16.2 per cent drop in net profit for its fourth quarter ended Dec 31, 2014, to S$140.3 million, while revenue fell 4.6 per cent to S$1.85 billion.

For the full year, net profit fell 8.4 per cent to S$531.95 million. Accordingly, earnings per share fell 9 per cent to 17.06 Singapore cents, from 18.73 Singapore cents a year ago.

Revenue, too, slipped 1.4 per cent to S$6.54 billion.
All its sectors' revenues (aerospace, electronics, land systems) were comparable to year-ago levels, except for marine which reported higher revenue, but revenue from "others", mainly attributable to Miltope, fell 18 per cent. Miltope makes militarised and rugged computer equipment and commercial computer-related products for the aerospace market.'

Look at the overall news. Don't reply so fast... I'm still updating WOT... But then again... doing deep analysis and writing one is not for me. I analyse other people's analysis more.

The problem is with net profit, eps, revenue all dropping. But in the mid-long term, is that gonna be a problem?

My investment tends to be longer than yours, usually stretching years. Is this a counter to hold? Yes. Is the dividend sustainable? Doubt so. But would the cut be deep? Don't think so. The real result can only be known 3-5years later if we make the buy/sell call now.
Anyway, I'm not joining you guys in debating. Buy/Sell up to you all. Not like this counter will kill anyone if they buy and hold.

 

[Keverus]

Guys, any comments on this article?

ST Engineering - A Good Business But A Lousy Stock, Why???

Over the last 5 years, ST Engineering has only provided its shareholders with a 10% capital gain! That's really a miserable return compared to STI's 20% gain over the same period which is almost double of STE!

One may argue that STE pays better dividends, but its only slightly better at around 4% while the index paid close to 3%. If we take a simple maths of 1% extra dividends over 5 years, that 5% extra still didn't help the STE to beat the index. STE still under performed the index by roughly 5% during the 5 year cycle.

So what was wrong?
Well lets take another look at STE using the 4 M approach (taken from Phil Town's Rule #1, an amazing book for all new investors)

Meaning
- STI Component
- Government Backed
- Widely Covered by Analysts
Moat
- Solid Defense Industry
- High Barrier of Entry
- Patented Technology
Management
- Established Track Record
- Long History of Dividend Payouts
Margin of Safety
- High ROE (20-30%)
- High PE (20 times up)
- High PB (5 times up)
- Low Dividend Yield (4%)

Of the 4 areas, I think all of them are excellent except for the Margin of Safety part, STE was simply trading at too high of a price! At over 20 times earnings investors were blindly over paying for this darling and this resulted in very low future returns.

If the investors had paid like say 15 times earnings with a 5% yield, they would most probably had outperformed the index over that 5 year period. Currently many of our blue chips are trading at high multiples too , take for example SGX, Starhub, Thaibev, ComfortDelgro and SIA Engg. The lesson here is that when one pays too much for a stock, even for a very good business, it may take too long of a time to get his money back.

Written in nov 2014.

source: http://stockbrokerplayspoker.blogspot.sg/2014/11/st-engineering-good-business-but-lousy.html

 

[Perisher]

Fairly written? Not a very in-depth analysis. Peace out.

 

[Shion]

Happy = Buy

Not happy = Don't buy

End of this thread.

 

[Keverus]

Happy = Buy

Not happy = Don't buy

End of this thread.

why u edit ur post? you hua gan gan shuo

 

[ValueInvestor]

Mr K should do some self reflection on why so many people are attacking or attacked him?

why helpful regulars like perisher and shiny things no people attack them leh?

 

[ValueInvestor]

Ok, then challenge me in TA. Why not states your probability? Can? Before you mention rubbish? Let's the results so the final judgement? Seem like you having some EQ problems.

at the first place, can TA make $$ or not?

LOL

 

[Mecisteus]

what do you mean by fully valued? in terms of dbs vickers, that means sell call....ie. dork32 misunderstood.

and i fully agree with you about the unsustainability of high divs. EPS 17 cents, payout 15? i rly dont know how they intend to do this magic.

the definitions and actions to be taken are quite subjective. in general, sell or don't buy if you can find alternative stocks with higher expected returns. hold if you cannot find another alternative.

if profits maintain, high dividends can still sustain. but the higher payout means less buffer for the company to maintain or increase dividends in a financial crisis. so that is the risk to consider.

with regards to the recent high contract wins for the aerospace, it is quite sensationalized actually. it is a positive news for an unusually higher contract wins in the aerospace sector. dont forget, STE is made up of the electronics, marine and land systems too. most likely, the other sectors are down. thus, there is no announcement to be made.

 

[ValueInvestor]

After watching the show for so long, when a guy says something something... probably means the opposite.

Too late to quote others but the idea is there.

Consperms... if he not upset... will not play until go write a thread to complain and get others banned LOL

what a kid hahahahaha

 

[Keverus]

Mr K should do some self reflection on why so many people are attacking or attacked him?

why helpful regulars like perisher and shiny things no people attack them leh?

1. i dont aim to please.

2. helpful regulars like perisher and shiny things got "attack" me?

 

[ValueInvestor]

starhub has been paying 100% of their earnings as dividends for the past 6 years

they make 20 cents they pay 20 cents dividends, yet its a solid blue chip with 5% yield that many investors like

STE is not even paying out 100% of earnings, yet mr K is saying this a weakness? LOL

goes to show you don't understand dividend policies, payout ratios and how to see free cash flow... LOL

 

[Perisher]

Consperms... if he not upset... will not play until go write a thread to complain and get others banned LOL

what a kid hahahahaha

Here we go again...

 

[SpeedingBullet]

This forum rly going downhill. Lolol

 

[ValueInvestor]

26 year old with only 2 years market experience, yet he thinks his analysis is as good as those full time research analyst in the banks/brokerage house, LOL

 

[Keverus]

the definitions and actions to be taken are quite subjective. in general, sell or don't buy if you can find alternative stocks with higher expected returns. hold if you cannot find another alternative.

i get where you're going, but i think you think too deep. i was just asking if you have a sell/hold/buy call on ST Eng, thats all. because frankly,I find that whatever the case, you should make a call. that's the point of an analysis, right? there must be a conclusion.

and by saying fully valued, like i mentioned, it could be construed as a SELL call. that's the term DBS Vickers use.

if profits maintain, high dividends can still sustain. but the higher payout means less buffer for the company to maintain or increase dividends in a financial crisis. so that is the risk to consider.

it is this buffer that i think investors should be wary about,.

 

[wahkao3]

Happy = Buy

Not happy = Don't buy

End of this thread.

low risk+high return = buy
else dont buy

 

[ValueInvestor]

low risk+high return = buy
else dont buy

can give 3 examples of what is low risk and high returns to buy now?