Singapore Technologies Engineering’s (STE) growth outlook was positive, but the Covid-19 outbreak has dimmed the outlook, mainly due to the aerospace segment. As for the group’s other operations, Electronics accounted for 33% of FY19 net profit while Land Systems contributed 13%. The remaining 9% is from Marine.

Certain pockets such as satellite comms in Electronics have also been impacted, but most other segments are not as affected, though we note that there could be supply chain issues which may result in delays in production.

About a third of the group’s business is defense-related. BUY.

Source: OCBC Research - 19 Nov 2020