Roy Chen, an analyst from UOB Kay Hian, maintained the Hold rating on ST Engineering. The associated price target was raised to S$8.56.
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Roy Chen has given his Hold rating due to a combination of factors influencing ST Engineering’s current financial performance and future outlook. The company’s net profit for the first half of 2025 was in line with expectations, showing a 19.7% year-over-year increase, which indicates stable financial health. However, the revenue growth, while positive at 7.2% year-over-year, slightly lagged behind projections, suggesting a need for improvement in the second half of the year.
Despite the strong performance in the Defence & Public Security segment, which exceeded expectations due to better operating margins, challenges remain in the Satcom area, affecting the overall performance of the Urban Solutions & Satcom segment. Additionally, while the Commercial Aerospace segment showed resilience against external pressures like the US-China tariff war, the valuation of ST Engineering’s stock does not appear particularly attractive at present. These mixed signals contribute to the decision to maintain a Hold rating, as the company is on a growth track but lacks immediate catalysts for a significant re-rating.
In another report released today, DBS also maintained a Hold rating on the stock with a S$8.20 price target.