Brokers' take

ST Engineering > Buy (maintained) UOB Kay Hian Research, March 29 March 29 close: S$3.74 Target price: S$4.40

ST ENGINEERING'S (STE) latest proposed acquisition of Newtec, a specialist in the satellite communications equipment and technology market, propels its Satcom reach into the broadcast and consumer space in Europe. We raise our target price by 8.4 per cent. Maintain "buy". Target: S$4.40.

On balance, we believe this acquisition is even more strategic than nacelle original equipment manufacturer (OEM) MRA System (MRAS) as it would lead to wider application, especially given that the 5G network is expected to be launched by 2020.