STE

STE: Deutsche maintains Buy with $4.70 TP, citing how the grp will be a beneficiary of a stronger USD and that the recent share price weakness comes largely with the sell-down of regional “yield plays”. House recent discussions with management suggest that there have been no changes to the grp’s operations, its balance sheet remains robust, and cash flow strong with prospects appearing healthy. Cite that STE is a Beneficiary of US$ strength with 30% of group sales from the US, and any strength in the US$ is positive for STE as about 30% of total group revenues are derived from the US. STE actively hedges 20-25% of its net US$:S$ exposure, with the rest being naturally hedged and exposed to translation differences back to the S$. According to house estimates, every 1c appreciation of the US$ vs. the S$ adds about $20m to STE’s revenues and $2m to its PBT.