Friday, November 03, 2006

Stock Upgraded: ST Engg target price raised to 3.3 by ML!

Merrill Lynch said it has upgraded its target price for ST Engineering to 3.30 sgd per share from 3.18 previously after the company posted modest growth in its third quarteearnings. Yesterday, ST Engineering reported that its third quarter net profit rose 10 pct year-on-year to 114.99 mln sgd, in line with the 100-116 mln sgd forecast made by analysts polled by XFN-Asia. "The outlook remains positive for ST Engineering, in our view," Merrill Lynch said in a note to clients. "The third-quarter results were not spectacular, but we believe that management is making excellent progress in establishing a long-term earnings platform for the group. "The integration of recent acquisitions has encountered no problems thus far and management is optimistic that profit contribution should gradually increase over the next year," it said. Merrill Lynch said it has slightly increased its 2007 and 2008 net profit estimates for ST Engineering to 476 mln sgd and 513 mln, respectively, to factor in contributions from the 635 mln usd Airbus contract. At 11.27 am, ST Engineering was down 0.02 sgd or 0.66 pct at 3.02 with 637,000 shares traded.

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