ST Engineering's aerospace arm has secured new contracts worth $920m in 2Q15. This is a 77% improvement from the same period last year when ST Aerospace clinched $520m of contracts.
The latest bag of contracts involve airframe, component and engine maintenance, as well as engine wash and pilot training.
The latest contract wins takes the group’s order book to ~S$13.1b and adds geographical diversity (Asia, Europe, and US) to STE’s pipeline.
In 1Q15, STE’s aerospace division delivered revenue and earnings of S$491m and S$57.3m respectively, and accounted for about 44% of the group’s bottom line.
At current prices, STE trades at 18.6x forward P/E and 4.6x P/B, with an indicative dividend yield of 4.4%. Overall, the street has 5 Buy, 7 Hold, and 2 Sell ratings on the engineering group with a consensus TP of $3.54.
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