Singapore Technologies Engineering (STE) reported a 1% YoY rise in revenue to S$1.6b and a 5.3% increase in net profit to S$134.6m in 3Q18, bringing 9M18 net profit to S$369.8m or 70% of our full year figure.

Results were slightly above our expectations – as a reference, 9M17 net profit accounted for 65% of the full year figure.

Indeed, the group ended 9M18 with an order book of S$13.3b, of which S$1.6b will be delivered in the remaining months of 2018, meaning that at least S$1.6b of revenue is secured for the upcoming 4Q.

STE continues to be well-placed to deliver long-term sustainable growth. Pending an analyst briefing, we maintain our BUY rating but put our fair value estimate of S$3.95 under review.

Source: OCBC Research - 14 Nov 2018