SINGAPORE (Oct 14): CIMB has maintained its “add” call on ST Engineering with a target price of $3.60 as new CEO Vincent Chong seeks to divest non-performing businesses at a faster pace but remains focus on engineering, defence and electronics as its core capabilities.

In a flash note on Thursday, analyst Lim Siew Khee says the electronics division has been showing a steady 10% growth, competing against the likes of Panasonic and Siemens as its solutions are largely proprietary. This division has reaped the benefits from trends such as urbanisation, smart cities development and demand for data connectivity and security.

The electronics division is expected to secure about $2.2 billion worth of contracts in 2016, says Lim, and has already secured $1.1 billion in contracts in 1H16, with more than $700 million from advanced electronics and technology solutions.

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