ST Engineering

ST Engineering: Awarded two separate contracts under its aerospace arm, ST Aerospace, with Qatar Airways and Spring Airlines. The contract from Qatar Airways is a five-year training contract for the multi-crew pilot licence (MPL) which will have ST undertake the global recruitment and assessment of cadets to the training, eventually leading up to the eventual employment as Airbus A320 Type Rated First Officers. It will also include ST customizing the cadet training content for the airline's operations. Separately, ST Aerospace was awarded an exclusive component "maintenance-by-the-hour" contract of US$28m (S$32.3m) by Spring Airlines Japan. The MRO contract involves component repair management support for 22 of the airline's Boeing 737-800, as well as warranty management and consignment/ pool access to its global rotables inventory pool. The contract is expected to commence in 2H13 for a period of eight years. According to Bloomberg's consensus, the 12-month TP for ST Engineering of $4.41 indicates an upside of 10.5% based on the last closing price of $3.99. STE trades at a forward P/E of 20.0x.