Singapore Technologies Engineering (STE) announced yesterday that its aerospace arm, ST Aerospace, has secured new contracts worth S$770m in 2Q16. These projects range from airframe maintenance and cabin interiors, to engine wash, and component repair and overhauls. These also include line and heavy airframe maintenance for commercial airlines and military operators, as well as cabin interior modifications for various customers.

Recall that STE was sitting on an order book of S$11.5b as of end 1Q16, of which, it expects to deliver about S$3.0b over the rest of 2016. We expect to see further order updates for its Electronics and Marine segments in the coming days. However, given the strong run-up in share price over the past two weeks, we are placing our BUY rating and S$3.24 fair value under review.

Source: OCBC Research - 13 Jul 2016