ST Engineering shares soar 8.9% as conflict in Iran continues

[SINGAPORE] Shares of ST Engineering jumped as much as 8.9 per cent on Tuesday (Mar 3) as the US-Israel-Iran conflict continued for a fourth day.

The counter climbed S$0.91 to S$11.16 as at 9.30 am, posting a second straight day of gains after closing 2.8 per cent higher the previous day.

This led a recovery for the Straits Times Index (STI), which was up 0.9 per cent at the same time after falling 2.1 per cent the previous day.

Analysts said the defence sector was likely to see gains amid the conflict, buoyed by the prospect of rising global defence budgets.

“ST Engineering is looking to double its international sales this year, with the Middle East as its major market,” said PhillipCapital analysts on Monday.

RHB analyst Shekhar Jaiswal concurred in a note on Tuesday, stating that defence and public security “should remain a structural growth pillar” for the company, underpinned by the ongoing conflict.

He added that the push to increase military readiness in Europe was another positive factor for ST Engineering, as was the push for munitions refill, defence electronics and critical infrastructure cyber protection in parts of Asia.

Jaiswal also highlighted “early momentum” from a 315 million euro (S$470 million) Qatar land platforms maintenance, repair and overhaul contract as a defence booster for the company.

A record order book that “underpins stronger backlog conversion” through 2026, and beyond, as well as capacity-led growth in commercial aerospace were also flagged as positive drivers for ST Engineering.

He reiterated a “buy” call for the stock and raised its target price to S$11.70 from S$10.70.