RHB reiterates ST Engineering recommendation despite Covid downside risks

Despite a likely slower profit recovery arising from the Covid-19 pandemic, RHB analyst Shekhar Jaiswal remains steadfastly behind ST Engineering. He believes that the counter will record strong growth in 2021 on the back of normalised order deliveries across all segments. He has therefore once again maintained his “buy” call on the counter and $3.90 target price, accompanied by an 18% upside. 

“Given its record-high orderbook that offers revenue visibility beyond 2020, a well-diversified business model that will mitigate near-term earnings volatility, sustainable dividend payout and below average P/E valuation, we believe ST Engineering could continue to outperform the STI in 2020,” says Jaiswal. RHB has consequently named the stock one of its “diamonds in the rough” for Southeast Asia, with global technology, defence and engineering group being the only Singapore stock on the list.