ST Engineering

ST Engineering: Reported 1Q12 rev which was in-line. Rev at 1.54b, -2% yoy and flat qoq, while net profit at $134.4m, +21% yoy and -11.7% qoq. Ebit margins improved at 9.4% vs 8.2% yoy. Grp’s rev was led by its Aerospace and Electronics sectors, which registered comparable rev of $456m and $452m respectively, while revenue for Land Systems and Marine sectors were down 11% and 10% at $317m and $244m respectively, as the grp completed its UK Warthog programme in 1H11 and also on back of lower shipbuilding revenue. Margins improved, due to favourable sales mix on grp’s Aerospace and marine sector , although it was partially offset by lower other income and unfavourable foreign exchange impact. Electronics sector recorded comparable PBT of $33.7m, while Land Systems sector recorded 7% lower PBT at $23.7m due to higher operating expenses and finance costs. Barring unforeseen circumstances, the Group expects to achieve higher Revenue and PBT for FY12 vs FY11. Overall fundamentals remain strong, with order book at $12.2b, of which about $3.2b is expected to be delivered in the remaining months of 2012. Ratings as follow: UOB Kay Hian maintains Buy with $3.34 TP