ST Engineering share price could re-rate to $15?

For most companies, geopolitical conflicts are bad due to economic uncertainties, supply chain disruptions and negative consumer sentiments. But for ST Engineering, being a defence contractor, war is good as it benefits from global demand for its products – ammunitions and armoured platforms. Year-to-date, ST Engineering share price surged 34% to reach $11.27.

The last time that I covered ST Engineering share price was in August 2019. Back then, the counter was trading around $4. Fast forward six years, few investors would have predicted that ST Engineering share price would rise by nearly 3-fold. After all, ST Engineering share price is known to be a very defensive stock with very low volatility. In fact, the 5-year beta is just 0.57 vis-à-vis DBS’ 1.17.

Due to the historically low volatility of ST Engineering share price, the explosive bull run for the past 2 years is indeed unusual. In this article, I will share my thoughts on the plausible factors for driving this structural change in ST Engineering share price.

As one of the two big boys in local aerospace MRO industry and being a strategic defence contractor in Singapore, ST Engineering’s bulk revenue come from its aerospace commercial and defence contracts. Its order book is usually massive and multi-year and typically runs into tens of billions of dollars. As at 31 March 2026, the order book is $34.5 billion, with $8 billion expected to be delivered over the remainder of the year.

The biggest driving factor for ST Engineering share price should be its strong financial performance – net profit for FY2024 was $703 million and $850.8 million (Base Operating Performance) for FY2025. The main reason FY2025 net profit dropped by 34% was a one-off, non-cash S$689 million hit of its Satellite Communications system, iDirect. Elon Musk’ Starlink proved to be too powerful to the extent that ST Engineering has to write-down iDirect’s value to nearly $170 million (from a carrying value of $837 million).

On the flip side, the impairment is non-cash. Also, because that massive revaluation of iDirect’s assets has already been fully flushed out of the system, it will not reoccur in 2026. Furthermore, the big boys should be betting that ST Engineering’s net profit could hit that elusive $1 billion mark for FY2026 on the back of the commercial aerospace and defence contracts. Against this backdrop, ST Engineering share price soared to record levels in 2026.

Another driver for the robust ST Engineering share price should be the aggressive shares buybacks conducted by the company. ST Engineering bought back a staggering 11.25 million shares throughout 2025 until the AGM on 23 April 2026. The aggressive shares buybacks, coupled with the solid financial results, helped to push ST Engineering share price to unprecedented levels.Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested and have never invested in ST Engineering before. Whether ST Engineering share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

ST Engineering share price at right time and right place

The robust form of ST Engineering share price takes place at the right time and right place as [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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