ST Engineering shares fall as much as 4.7% after reporting softer Q2 orders

[SINGAPORE] Shares of ST Engineering fell as much as 4.7 per cent on Tuesday (Aug 11) after the company reported a year-on-year drop in second-quarter order wins.

The defence and engineering group on Friday said it secured S$2.9 billion in new contracts in Q2 2026. This was a 38.3 per cent drop from its S$4.7 billion worth of orders in the corresponding period last year.

Its 2026 order total stemmed from S$1.2 billion in the commercial aerospace segment, S$1.2 billion in the defence and public security segment and S$500 million in the urban solutions and satcom segment. This was down from S$1.5 billion, S$1.5 billion and S$1.7 billion, respectively.

The counter fell to as low as S$9.83 in the first 15 minutes of trading on Tuesday, retreating S$0.49. About 2.6 million securities had changed hands by then. As at midday, it had pared some losses to be 2.4 per cent or S$0.25 down at S$10.07.

“The timing of contract completions may have had a hand in the performance as management has indicated that underlying demand and customer negotiations remain healthy,” said Citi analyst Luis Hilado on Friday.

While the brokerage acknowledged near-term risks such as labour shortages, cost inflation and integration risks for ST Engineering, it took a positive view that a “healthy base of contracts to win” could provide economies of scale that offset these risks.

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“We believe the steady and predictable growth in the current uncertain market conditions will drive it above its mean valuation,” said Hilado’s note, which had a target price of S$10.65.

Singapore’s High Court on Friday also rejected a bid to bring unit ST Engineering Aerospace Systems into a trademark infringement suit over allegedly counterfeit components supplied for use in Republic of Singapore Air Force aircraft.