ST Engineering (S63) AI Stock Analysis

• Market Cap: S$25.62B
• Dividend Yield: 2.08%
• Average Volume (3M): 4.37M
• Price to Earnings (P/E): 33.3
• Beta (1Y): 0.75
• Revenue Growth: 8.49%
• EPS Growth: 19.65%
• Country: SG
• Employees: 27,359
• Sector: Industrials
• Sector Strength: 72
• Industry: Aerospace & Defense
• EPS (TTM): 0.13
• Shares Outstanding: 3,122,495,000
• 10 Day Avg. Volume: 3,292,750
• 30 Day Avg. Volume: 4,370,518
• PEG Ratio: 0.98
• Price to Book (P/B): 5.44
• Price to Sales (P/S): 1.29
• P/FCF Ratio: 12.38
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: S$9.04
• Price Target Upside: 10.65% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 0.35
• Revenue Forecast (FY): S$15.89B

• Rating: 70 Outperform
• Price Target: S$9.50 ▲(16.28% Upside)

ST Engineering's strong financial performance, characterized by consistent revenue growth and robust cash flow, is the primary driver of its stock score. Technical indicators show a positive trend, although valuation metrics suggest the stock may be overvalued. The absence of earnings call data and corporate events limits additional insights.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong market demand and effective business strategies, supporting long-term financial health.

Contract Wins

Securing large contracts enhances revenue visibility and strengthens market position, contributing to sustained business growth.

Cash Flow Generation

Robust cash flow generation supports investment in growth opportunities and provides financial flexibility for strategic initiatives.

Negative Factors

High Leverage

High leverage can increase financial risk, potentially impacting the company's ability to invest in growth and manage economic downturns.

Equity Financing

A lower equity ratio may limit the company's ability to raise additional capital without increasing debt, affecting long-term financial stability.

Profitability Margins

While profitability margins are healthy, maintaining or improving them is crucial for sustaining competitive advantage and shareholder value.

ST Engineering Business Overview & Revenue Model

Company Description

ST Engineering (S63) is a global technology, defense, and engineering group based in Singapore. The company operates across four key sectors: Aerospace, Electronics, Land Systems, and Marine. ST Engineering provides a wide range of core products and services, including aircraft maintenance, cybersecurity solutions, smart city technologies, defense systems, and marine engineering. The company's focus on innovation and technology integration positions it as a leader in providing advanced engineering solutions to both civilian and military markets.

How the Company Makes Money

ST Engineering generates revenue through diverse streams across its four sectors. In the Aerospace segment, the company earns money from aircraft maintenance, repair, and overhaul (MRO) services, as well as manufacturing aircraft components. The Electronics sector contributes through the provision of cybersecurity products, smart city solutions, and integrated electronics systems for various applications. Revenue from the Land Systems segment comes from the sale of military vehicles, weapon systems, and logistics support services. The Marine sector generates income from building and repairing ships and offshore platforms. Additionally, ST Engineering engages in strategic partnerships and collaborations with government agencies and private enterprises, enhancing its market reach and creating opportunities for long-term contracts and projects, which are crucial for stable revenue generation.

ST Engineering Financial Statement Overview

Summary

ST Engineering exhibits strong financial health with consistent revenue growth and solid profitability margins. While the company is highly leveraged, it effectively utilizes equity to generate returns. Cash flow generation is robust, supporting its financial stability.

Income Statement

ST Engineering has demonstrated consistent revenue growth over the years, with a notable 4.81% increase in 2024. The company maintains healthy profitability margins, with a gross profit margin of 19.28% and a net profit margin of 6.23% in 2024. EBIT and EBITDA margins are also strong at 9.64% and 14.41%, respectively, indicating efficient operations and cost management.

Balance Sheet

The balance sheet reflects a high debt-to-equity ratio of 2.18 in 2024, which suggests significant leverage. However, the return on equity is robust at 26.30%, indicating effective use of equity to generate profits. The equity ratio stands at 16.46%, showing a moderate level of equity financing relative to total assets.

Cash Flow

Cash flow performance is strong, with an impressive free cash flow growth rate of 81.98% in 2024. The operating cash flow to net income ratio is 2.45, indicating solid cash generation relative to net income. The free cash flow to net income ratio is 0.68, reflecting good cash conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	11.67B	11.28B	10.10B	9.04B	7.69B	7.16B
Gross Profit	2.25B	2.17B	1.97B	1.70B	1.54B	1.51B
EBITDA	1.71B	1.62B	1.42B	1.22B	1.06B	932.23M
Net Income	768.56M	702.26M	586.47M	535.01M	570.54M	521.84M
Balance Sheet
Total Assets	15.91B	16.22B	15.38B	14.96B	10.67B	10.21B
Cash, Cash Equivalents and Short-Term Investments	354.01M	430.64M	353.34M	601.75M	815.92M	730.62M
Total Debt	5.52B	5.82B	6.11B	6.53B	2.12B	2.05B
Total Liabilities	12.87B	13.27B	12.63B	12.31B	8.01B	7.64B
Stockholders Equity	2.71B	2.67B	2.46B	2.40B	2.41B	2.29B
Cash Flow
Free Cash Flow	1.12B	1.17B	562.64M	-89.83M	676.20M	1.20B
Operating Cash Flow	1.67B	1.72B	1.18B	673.10M	1.10B	1.49B
Investing Cash Flow	-532.42M	-414.33M	-200.76M	-4.57B	-453.48M	-295.18M
Financing Cash Flow	-1.16B	-1.22B	-1.23B	3.70B	-567.05M	-913.67M

ST Engineering Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 8.17
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SG:S63, the sentiment is Negative. The current price of 8.17 is below the 20-day moving average (MA) of 8.26, below the 50-day MA of 8.36, and above the 200-day MA of 7.84, indicating a neutral trend. The MACD of -0.05 indicates Negative momentum. The RSI at 42.20 is Neutral, neither overbought nor oversold. The STOCH value of 35.27 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for SG:S63.

ST Engineering Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BS6	79 Outperform	S$13.91B	9.76	30.76%	3.41%	0.42%	40.48%
U96	71 Outperform	S$10.52B	10.36	19.65%	4.40%	-6.69%	6.76%
BN4	71 Outperform	S$17.69B	18.02	8.75%	3.38%	-0.62%	34.52%
S63	70 Outperform	S$25.62B	33.33	28.83%	2.08%	8.49%	19.65%
C6L	70 Outperform	S$19.76B	8.22	14.98%	6.26%	1.91%	14.96%
5E2	65 Neutral	S$7.08B	26.73	4.07%	0.72%	25.68%	―
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

ST Engineering Corporate Events

ST Engineering Adopts Market Capitalisation for IPT Materiality Assessment

ST Engineering has received approval from the Singapore Exchange Securities Trading Limited to use its market capitalisation as an alternative reference point for determining the materiality of interested person transactions (IPTs) from FY2026 onwards. This decision comes as the company’s Group Net Tangible Assets (NTA) remains negative due to acquisitions involving intangible assets. The market capitalisation is considered a more accurate reflection of the company’s value, allowing for better assessment of IPTs that require announcements and shareholder approvals.

ST Engineering Achieves Strong Financial Growth in 9M2025

ST Engineering reported a robust financial performance for the first nine months of 2025, with a 9% year-on-year increase in revenue to $9.1 billion, driven by growth across all business segments. The company secured $14.0 billion in new contracts, raising its order book to a record $32.6 billion. Additionally, ST Engineering announced a final dividend of 6.0 cents and a special dividend of 5.0 cents, alongside a 4.0 cents interim dividend for the third quarter of 2025. The company also completed several divestments, generating significant cash proceeds and gains.

ST Engineering Faces $667 Million Impairment in iDirect Group Amid NGSO Competition

ST Engineering has announced a significant non-cash impairment of $667 million for its iDirect group, reducing its value to $170 million as of September 2025. This impairment is attributed to the rapid expansion and competitive pressure from Non-geostationary Satellite Orbit (NGSO) operators like Starlink and Kuiper, which are capturing market share from traditional Geostationary Earth Orbit (GEO) operators. Additionally, the adoption of iDirect’s next-generation platform, Intuition, has been slower than anticipated due to delays in GEO satellite launches. This strategic reassessment highlights the challenges faced by ST Engineering in adapting to the evolving satellite communications landscape.

ST Engineering Faces $667 Million Impairment Amid Satellite Industry Shift

ST Engineering has announced a significant non-cash impairment of $667 million on its iDirect group, reducing its value to $170 million as of September 2025. This decision comes amid a rapidly changing satellite industry landscape, where Non-geostationary Satellite Orbit (NGSO) operators like Starlink and Kuiper are outpacing Geostationary Earth Orbit (GEO) operators by deploying more satellites and offering superior services. The shift in market dynamics has led to a consolidation among GEO operators and a slower-than-expected adoption of iDirect’s Intuition platform, impacting ST Engineering’s strategic positioning in the satellite communications sector.

ST Engineering Secures $4.9 Billion in Q3 2025 Contracts

ST Engineering announced significant contract wins totaling $4.9 billion for the third quarter of 2025, bringing the total for the first nine months of the year to $14 billion. The contracts span across its Commercial Aerospace, Defence & Public Security, and Urban Solutions & Satcom sectors, reflecting strong market demand and customer confidence. The Commercial Aerospace division secured $1.4 billion in contracts, including a multi-year agreement for Airbus A380 maintenance, while the Defence & Public Security division won $2.4 billion in contracts, highlighting the company’s robust capabilities in digital systems, cybersecurity, and satellite solutions.