ST Engineering (STE) reported its FY14 results this morning, with revenue easing 1.4% to S$6539.4m, or about 2.0% below our forecast, while profit before tax slipped 10.8% to S$650.7m, which STE had earlier guided that it would be lower. Net profit fell 8.4% to S$532.0m, or about 2.7% below our estimate. STE declared a final dividend of 4 S cents/share plus a special of 7 S cents/share, bringing the full-year dividend to 15 S cents, unchanged from FY13.

Going forward, STE expects FY15 revenue and PBT to be comparable to FY14. By segments, STE expects Electronics to perform better, while Marine could remain mixed. We will have more after the analyst briefing later. For now, we maintain our HOLD rating but our S$3.47 fair value is under review.

Source: OCBC Research - 27 Feb 2015