ST Engineering (STE): Recent oil price weakness is lending cheer to the aviation industry as profitability rises. Deutsche believes if sector conditions continue to improve and is sustainable, associated MRO activities may rise.
In addition, The strength of USD should also benefit STE with about 24% of group revenues from the US. STE's restructuring in Aerospace (Europe) should be contained in FY14 and the group previously highlighted that its Marine issues would clear by early-2015.
Accordingly, Deutsche believes group earnings should recover in 2015. House maintains Buy with TP of $3.90.
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