ST Engineering

ST Engineering: OCBC maintains Buy with $3.81 TP. Note that STE has outperformed the STI significantly since the beginning of the year, rising 29.0% versus the 15.6% increase by the index. The stock reached its 52-week high of S$3.55 last Friday. The counter is trading at a historical P/E multiple of 20.1x and should still have room to climb. With the win of S$179m worth of contracts by ST Marine announced in 3Q12 so far, we think that STE’s order book may be greater than S$13b by the end of 3Q12. We note that the order book has been growing faster than annual revenues, implying increasing earnings visibility into the future. Rolling forward our valuation to blended 2H12/1H13 EPS and increasing our P/E multiple from 20.0x to 20.5x.