Brokers' take

ST Engineering | Hold (downgraded) Aug 15 close: S$4.07 Target price: S$4.30 Maybank Kim Eng, Aug 14

Operationally, Q2 was in line with expectations with Ebitda boosted by the MRAS integration in April. First half Ebitda forms around 45 per cent of estimated FY2019 earnings. But Patmi was lower than expected due to a higher depreciation and amortisation (D&A) run-rate post-integration than we initially estimated.

A negative in the first half results is a sharp increase in D&A after the MRAS integration, much higher than we had initially estimated. The lion's share of the increase came from goodwill amortisation.