SINGAPORE (Nov 30): UOB KayHian is maintaining “market weight” on the local aviation sector, while its top “buy” picks remain SATS and ST Engineering, which have been given price targets of $5.40 and $4.06, respectively.

The research house has lowered its full-year net profit estimate for ST Engineering by 3.1%, or $17 million, to $530 million from $547 million previously. This is to factor in an expected recognition of $20-25 million in impairment losses for 4Q18, largely due to the completion of the group’s divestment of Leeboy India (LBI).  

In a Friday report, analyst K Ajith recommends that shareholders of ST Engineering remain invested, as this write-down should be viewed as a one-off. In the longer run, he believes the sale of LBI will reduce ST Engineering’s cash burn and improve group efficiency.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Related Stories

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook