Latest news with #SingaporeTechnologiesEngineering
Yahoo
29-05-2025
- Business
- Yahoo
Keppel's Investor Day 2025: 5 Things Investors Should Note
When it comes to the communication of long-term strategy and plans, nothing beats a company hosting an Investor Day session. Several blue-chip stocks, including Singapore Technologies Engineering (SGX: S63) and CapitaLand Investment Limited (SGX: 9CI), have hosted Investor Day sessions which you can read about here and here, respectively. Next in line is Keppel Ltd (SGX: BN4), which released its Investor Day 2025 slides earlier this week. Keppel's previous Investor Day 2024 was released in August last year, and this update provides the latest financial targets for the asset manager. Here are five aspects of the group's Investor Day that investors should learn about. First off, Keppel is aiming to grow its funds under management (FUM) to S$200 billion by 2030. The group will focus on organic fundraising for its flagship funds while also expanding its European platform through its Aermont Capital acquisition. Keppel will also rely on strategic co-investments with private funds and explore mergers and acquisitions to grow its FUM. Based on a 0.5 percentage point fee to FUM ratio, this means that Keppel could potentially earn up to S$1 billion in asset management fees by 2030. Such fee income is important as it provides a stream of recurring income for the group. Recurring income has risen from just 21% of net profit back in 2021 to 72% of net profit by 2024. Asset management fees have also grown by 25% per annum from 2020 to 2024, growing from S$180 million to S$436 million. Keppel's intermediate FUM target is S$100 billion by 2026, using fundraising across its flagship funds and organic growth from investing well. To achieve the S$200 billion FUM target, Keppel needs to scale its fund investment platforms and seize opportunities in megatrends such as energy transition and digitalisation. In line with its asset-light strategy, Keppel outlined its cumulative asset monetisation objective of hitting S$10 billion to S$12 billion by 2026. S$347 million of assets were monetised for the year-to-date 2025, with another S$550 million of real estate deals in advanced negotiations. Investors should look to the group's legacy offshore and marine (O&M) assets for these divestments. A new fund, Keppel Offshore Infrastructure Fund, was established with a target size of S$4.5 billion. The initial focus of this fund will be to build steady cash flows from bareboat charters. When market conditions improve, Keppel will then sell away individual rigs or portfolios through securitisation, public listing, or a trade sale. Moving on to Keppel's Infrastructure division, the division targets to double the capacity of its integrated power business to 3 GW by 2030. There are also more than S$11 billion of project pipelines that the group is pursuing in areas such as operations and maintenance for waste-to-energy plants. The idea is to increase the flow of recurring income, as 66% of the division's power capacity is already contracted for three years or more. Infrastructure is Keppel's largest earnings contributor, with its profit growing nearly fivefold since 2021 to S$673 million in 2024. Keppel is also looking at decarbonisation and sustainability solutions as another growth engine. Keppel's SUR division will hinge on global trends to accelerate its growth. These include an ageing population, the shift to co-living spaces, rising construction costs, and the emergence of AI. A total of five SUR projects with a combined value of S$1.7 billion have been implemented. In addition, the division also acquired Watermark Retirement Communities in the US and is growing its presence in China. Future fund products may include retail, senior living, or new vehicles; legacy assets will undergo either monetisation or optimisation. The final area that Keppel plans to grow is its data centre portfolio. Global demand for data centres could more than triple by 2030 as more cloud players run large language models for generative AI. Keppel's Connectivity division partnered with Amazon Web Services, run by Amazon (NASDAQ: AMZN), to support the latter's global data centre infrastructure expansion. Accelerated computing and generative AI represent trillion-dollar opportunities that Keppel can leverage to grow its data centre portfolio to cater to these demands. In particular, the Asia-Pacific region should see a 19% per annum growth in data centre supply from 2023 to 2028, showcasing the investment attractiveness of this sector. Keppel plans to deepen its foothold in existing markets, expand into new markets, and pursue merger and acquisition opportunities. In the near term, the group plans to grow its data centre gross power capacity from 650 MW at the end of 2024 to 1.2 GW. Its data centre FUM is targeted to grow from S$10 billion to S$19 billion over the same period, and the division is pursuing a substantial deal pipeline of S$15 billion. Keppel has put forward a grand vision of what it plans to achieve by 2030. Each division has set bold objectives that it will work towards by looking for suitable catalysts and leveraging organic and acquisitive growth. Investors should keep a close eye on Keppel's progress as it executes these initiatives. Over time, they could be rewarded with a higher share price and more dividends should these efforts translate into higher profits and free cash flow. Big Tech is spending hundreds of billions on AI, and the ripple effects are just beginning. Our new investor guide shows how AI is changing the way companies generate revenue, structure their business models, and gain an edge. Even if you already know the major players, this report reveals something far MORE important: The why and how behind their moves, and what it means for your portfolio. Download your free report now. Follow us on Facebook and Telegram for the latest investing news and analyses! Disclosure: Royston Yang does not own shares in any of the companies mentioned. The post Keppel's Investor Day 2025: 5 Things Investors Should Note appeared first on The Smart Investor.
Yahoo
05-05-2025
- Business
- Yahoo
An Intrinsic Calculation For Singapore Technologies Engineering Ltd (SGX:S63) Suggests It's 31% Undervalued
The projected fair value for Singapore Technologies Engineering is S$10.63 based on 2 Stage Free Cash Flow to Equity Current share price of S$7.35 suggests Singapore Technologies Engineering is potentially 31% undervalued Analyst price target for S63 is S$7.28 which is 32% below our fair value estimate Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Singapore Technologies Engineering Ltd (SGX:S63) as an investment opportunity by taking the expected future cash flows and discounting them to their present value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Believe it or not, it's not too difficult to follow, as you'll see from our example! We would caution that there are many ways of valuing a company and, like the DCF, each technique has advantages and disadvantages in certain scenarios. For those who are keen learners of equity analysis, the Simply Wall St analysis model here may be something of interest to you. This technology could replace computers: discover the 20 stocks are working to make quantum computing a reality. We're using the 2-stage growth model, which simply means we take in account two stages of company's growth. In the initial period the company may have a higher growth rate and the second stage is usually assumed to have a stable growth rate. In the first stage we need to estimate the cash flows to the business over the next ten years. Where possible we use analyst estimates, but when these aren't available we extrapolate the previous free cash flow (FCF) from the last estimate or reported value. We assume companies with shrinking free cash flow will slow their rate of shrinkage, and that companies with growing free cash flow will see their growth rate slow, over this period. We do this to reflect that growth tends to slow more in the early years than it does in later years. Generally we assume that a dollar today is more valuable than a dollar in the future, so we need to discount the sum of these future cash flows to arrive at a present value estimate: 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 Levered FCF (SGD, Millions) S$987.5m S$1.15b S$1.24b S$1.27b S$1.37b S$1.43b S$1.49b S$1.53b S$1.58b S$1.63b Growth Rate Estimate Source Analyst x4 Analyst x4 Analyst x4 Analyst x1 Analyst x1 Est @ 4.44% Est @ 3.79% Est @ 3.33% Est @ 3.02% Est @ 2.79% Present Value (SGD, Millions) Discounted @ 6.2% S$930 S$1.0k S$1.0k S$998 S$1.0k S$999 S$977 S$951 S$923 S$893 ("Est" = FCF growth rate estimated by Simply Wall St)Present Value of 10-year Cash Flow (PVCF) = S$9.7b We now need to calculate the Terminal Value, which accounts for all the future cash flows after this ten year period. The Gordon Growth formula is used to calculate Terminal Value at a future annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.3%. We discount the terminal cash flows to today's value at a cost of equity of 6.2%. Terminal Value (TV)= FCF2034 × (1 + g) ÷ (r – g) = S$1.6b× (1 + 2.3%) ÷ (6.2%– 2.3%) = S$43b Present Value of Terminal Value (PVTV)= TV / (1 + r)10= S$43b÷ ( 1 + 6.2%)10= S$23b The total value, or equity value, is then the sum of the present value of the future cash flows, which in this case is S$33b. To get the intrinsic value per share, we divide this by the total number of shares outstanding. Relative to the current share price of S$7.4, the company appears quite good value at a 31% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent. The calculation above is very dependent on two assumptions. The first is the discount rate and the other is the cash flows. Part of investing is coming up with your own evaluation of a company's future performance, so try the calculation yourself and check your own assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Singapore Technologies Engineering as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 6.2%, which is based on a levered beta of 0.900. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business. See our latest analysis for Singapore Technologies Engineering Strength Earnings growth over the past year exceeded the industry. Debt is well covered by earnings and cashflows. Dividends are covered by earnings and cash flows. Weakness Dividend is low compared to the top 25% of dividend payers in the Aerospace & Defense market. Opportunity Annual earnings are forecast to grow faster than the Singaporean market. Trading below our estimate of fair value by more than 20%. Threat Revenue is forecast to grow slower than 20% per year. Whilst important, the DCF calculation shouldn't be the only metric you look at when researching a company. The DCF model is not a perfect stock valuation tool. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. Can we work out why the company is trading at a discount to intrinsic value? For Singapore Technologies Engineering, we've compiled three pertinent aspects you should further research: Risks: Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Singapore Technologies Engineering , and understanding it should be part of your investment process. Future Earnings: How does S63's growth rate compare to its peers and the wider market? Dig deeper into the analyst consensus number for the upcoming years by interacting with our free analyst growth expectation chart. Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing! PS. Simply Wall St updates its DCF calculation for every Singaporean stock every day, so if you want to find the intrinsic value of any other stock just search here. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
Business Times
29-04-2025
- Business
- Business Times
ST Engineering unit to issue US$750 million 4.25% notes due 2030
[SINGAPORE] A wholly owned subsidiary of Singapore Technologies Engineering (ST Engineering) has priced US$750 million in five-year notes with a 4.25 per cent fixed-rate coupon. The notes are expected to be issued on May 8, and will mature on May 8, 2030, ST Engineering said in a statement on Tuesday (Apr 29). These notes will be issued in denominations of US$200,000 and integral multiples of US$1,000 in excess thereof. Net proceeds of the issue will be used by the subsidiary, ST Engineering RHQ Ltd, to refinance existing borrowings, said ST Engineering. The notes are expected to be listed on the Singapore Exchange on May 9. They will be issued under the S$5 billion global medium-term note programme, which is unconditionally and irrevocably guaranteed by ST Engineering. The programme was set up in March 2020 to support the group's long-term strategy to enhance shareholder value, ST Engineering had previously said. It enables the group to tap the debt capital market for longer-tenor financing to optimise its short-term to long-term debt mix and its capital structure. ST Engineering shares fell S$0.03 or 0.4 per cent to close at S$7.32 on Tuesday, ahead of the announcement.
Independent Singapore
28-04-2025
- Automotive
- Independent Singapore
ST Engineering bags S$4.4B in new contracts for Q1 2025, boosted by defence and public security and commercial aerospace deals
SINGAPORE: Singapore Technologies Engineering (ST Engineering) secured S$4.4 billion in new contracts in the first quarter of 2025 (Q1 2025), mainly due to its commercial aerospace segment and defence and public security segment. Of this, S$1.3 billion came from the group's commercial aerospace segment, which included deals under its maintenance, repair, and overhaul (MRO) and aerostructures and systems (A&S) divisions. According to The Edge Singapore, this included several MRO contracts, such as a three-year agreement with an Asian airline for Boeing 787 reconditioning and exchange services. It also landed multi-year contracts for maintaining LEAP-1A engines with airlines in the Middle East and Asia. In its A&S division sub-segment, ST Engineering received orders for engine nacelles and composite floor panels, benefiting from the growing production of new aircraft. The defence and public security segment brought in the largest share, securing about S$2.7 billion in contracts. One of the deals was a S$200 million contract with Home Team Science & Technology Agency (HTX) to implement an island-wide public camera system for better real-time monitoring and faster responses to incidents. The group also secured contracts for cyber solutions and advanced encryption products, cloud-based security services, and an artificial intelligence (AI)-enabled cybersecurity system for critical infrastructure in the energy sector. The urban solutions and satellite communications (satcom) segment added S$0.5 billion through contracts for smart mobility, including rail electronics solutions for the Cross Island Line and mobile network upgrades for the Downtown Line. It also landed contracts to provide managed services for several car parks in Singapore. Meanwhile, its tolling business received new contracts for electronic road tolling, maintenance, and back office solutions. ST Engineering's smart utilities and infrastructure division also secured contracts to roll out integrated smart security management solutions for the city-state's public sector customers. Its satcom business won ground infrastructure contracts supporting the aviation, maritime, government, and defence sectors across multiple regions. Earlier in March, the group's shares jumped over 2% after announcing a higher dividend policy. In a bourse filing, the group stated that it plans to pay four cents per share for the first three quarters of FY2025 and a final dividend of six cents, totalling 18 cents. /TISG
Yahoo
17-04-2025
- Business
- Yahoo
Singapore Technologies Engineering (SGX:S63) Will Pay A Larger Dividend Than Last Year At SGD0.05
The board of Singapore Technologies Engineering Ltd (SGX:S63) has announced that it will be paying its dividend of SGD0.05 on the 15th of May, an increased payment from last year's comparable dividend. This makes the dividend yield 2.8%, which is above the industry average. While the dividend yield is important for income investors, it is also important to consider any large share price moves, as this will generally outweigh any gains from distributions. Investors will be pleased to see that Singapore Technologies Engineering's stock price has increased by 51% in the last 3 months, which is good for shareholders and can also explain a decrease in the dividend yield. AI is about to change healthcare. These 20 stocks are working on everything from early diagnostics to drug discovery. The best part - they are all under $10bn in marketcap - there is still time to get in early. If the payments aren't sustainable, a high yield for a few years won't matter that much. Prior to this announcement, Singapore Technologies Engineering's dividend made up quite a large proportion of earnings but only 53% of free cash flows. Since the dividend is just paying out cash to shareholders, we care more about the cash payout ratio from which we can see plenty is being left over for reinvestment in the business. Over the next year, EPS is forecast to expand by 50.6%. If the dividend continues along recent trends, we estimate the payout ratio will be 53%, which would make us comfortable with the sustainability of the dividend, despite the levels currently being quite high. Check out our latest analysis for Singapore Technologies Engineering The company has a long dividend track record, but it doesn't look great with cuts in the past. The dividend has gone from an annual total of SGD0.16 in 2015 to the most recent total annual payment of SGD0.20. This implies that the company grew its distributions at a yearly rate of about 2.3% over that duration. Modest growth in the dividend is good to see, but we think this is offset by historical cuts to the payments. It is hard to live on a dividend income if the company's earnings are not consistent. With a relatively unstable dividend, it's even more important to evaluate if earnings per share is growing, which could point to a growing dividend in the future. However, Singapore Technologies Engineering has only grown its earnings per share at 4.0% per annum over the past five years. Earnings are not growing quickly at all, and the company is paying out most of its profit as dividends. When a company prefers to pay out cash to its shareholders instead of reinvesting it, this can often say a lot about that company's dividend prospects. Overall, we always like to see the dividend being raised, but we don't think Singapore Technologies Engineering will make a great income stock. The company is generating plenty of cash, which could maintain the dividend for a while, but the track record hasn't been great. This company is not in the top tier of income providing stocks. Investors generally tend to favour companies with a consistent, stable dividend policy as opposed to those operating an irregular one. However, there are other things to consider for investors when analysing stock performance. Taking the debate a bit further, we've identified 1 warning sign for Singapore Technologies Engineering that investors need to be conscious of moving forward. Is Singapore Technologies Engineering not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Sign in to access your portfolio
