ST Engrg: Decent 3Q10 results. Revenue +10% yoy to $1.49b, net income +8% yoy to $130m. 9M earnings at 72-74% of consensus FY10E, despite ending of the Jobs Credit Scheme. Growth in all divisions, btwn +7% to +16%.
Order book at 3Q10 totaled $10.8b ($10.3b at end-09), expect operational stability through its 42% military exposure (of total sales) and another 10-15% in govt-related contracts...
Prospects appear to be improving. Recent airframe heavy maintenance contract wins totaling $370m suggest some delayed benefit from the recovery in airline capacity growth. New order announcements would be catalyst for further share price rerating. Mgt expects higher revenue, PBT in FY10 vs FY09…
Stock trades at 22x FY10E P/E. Attractive 4.5% yield may spur further upside.
RBS has Buy call with $4 target. Deutsche raises target to $3.95 from $3.65. KE retains $3.15 target.
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