Stock Upgraded: ST Engineering to outperform by CIMB-GK

CIMB-GK Research said it has upgraded its rating on ST Engineering to "outperform" from "neutral" and raised its target price to 3.42 sgd per share from 3.28 after its US unit VT Halter Marine won two contracts worth 214 mln usd. Halter Marine won a 199 mln usd contract with the US Navy to design and build a missile-range instrumentation ship and another with the US National Oceanic and Atmospheric Administration to design and build a small-waterplane-area twin-hulled coastal mapping vessel for 15 mln. "We believe these contracts will provide earnings visibility and offset concerns over the lack of revenue replacement for the Singapore Navy Frigate contract, which ends in 2007," CIMB-GK Research said in a note to clients. "VT Halter Marine (is poised) to break even in 2006 and turn profitable in 2007," it added. CIMB-GK expects ST Engineering's net profit to steadily improve from 396. 3 mln sgd last year to 427.6 mln this year, 508 mln next year and 575.5 mln in 2008. At 12:20 pm, ST Engineering was up 0.03 sgd or 1.06 pct at 2.87 on volume of 1.72 mln shares.