ST Engineering, a leading player in defence and public security, has reported a profit of S$702m for 2024, marking an 18% year-on-year (YoY) increase. This figure slightly surpassed analysts’ expectations, driven by robust performance in its Defence & Public Security and Urban Solutions & Satcom segments. The company is poised for continued growth in 2025, buoyed by strong free cash flow generation and potential dividend increases from 2025 to 2027.
The company’s international defence business is expected to benefit from heightened geopolitical tensions in Europe, providing a favourable backdrop for growth. Analyst Shekhar Jaiswal noted the positive surprise in the second half of 2024 margins, reinforcing confidence in the company’s future performance.
ST Engineering’s projected target price has been revised to S$5.90, reflecting a 12% upside potential. The company is also expected to maintain a yield of approximately 3%, making it an attractive proposition for investors seeking stable returns.
Looking ahead, ST Engineering’s strategic focus on expanding its international defence operations and leveraging its strong cash flow positions it well to navigate the challenges and opportunities of the coming years. The company’s commitment to enhancing shareholder value through potential dividend hikes further underscores its robust financial health and growth prospects.
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