ST Engineering: Kim Eng maintains hold with TP of $3.15, citing that share price appears fully valued at current 21X FY10 PE. With USD/SGD pair down 6% over last 3 mths, reaching an all time low of $1.317 yesterday, earnings could come under pressure. As majority of STE’s commercial contracts are in USD, management has guided that every one cent decline in USD/SGD, would translate to a decline of $1.3m in earnings….
Further notes tt ongoing concerns for the US recovery and a lack of new orders suggest tt ST Aerospace will need a longer time to get back to speed. Grp currently has an orderbook of $11.3b, expected to last for at least 3 yrs, but faces risks of a gradual dwindling of its orderbook for the above reasons.
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