RHB analyst Shekhar Jaiswal has named global technology, defence and engineering group ST Engineering as one of the research house’s best investment ideas for Southeast Asia -- the only stock from Singapore included in his list. The group’s well-diversified portfolio and strong focus on technology and innovation make it a resilient earning proposition and heralds strong long-term potential growth, leading to Jaiswal giving it a “buy” call with a $3.90 target price. 

In a July 29 report, Jaiswal chose 13 stocks, which he calls “diamonds in the rough”, based on several criteria, including return on equities (ROEs) of 15% or above, increasing margins, and net debt or shareholders’ funds of less than 0.7x.

On ST Engineering, he estimates its ROE to improve from 22.5% in 2020 to 26.8% in 2022 and net margin to expand from 7.2% in 2020 to 8.1% in 2022. 

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