ST Engineering (STE)

CGS-CIMB said the potential restructuring move could happen via the paring down or complete divestment of SIA's stake in SIAEC.

Despite the stock's exposure to aerospace, analysts do not expect significant change in dividend yield until 2022 at least.

Strong growth in 2021 has yet to be priced in and dividend yields are likely to remain consistent despite an earnings downgrade.

ST engineering was the only Singapore stock included on Jaiswal's list and net margin is expected to expand from 7.2% in 2020 to 8.1% in 2022.

While aviation is likely to cause ST Engineering to experience weakened earnings going forward, stable defence earnings and robust balance sheets will likely see dividend remain constant.

SINGAPORE (April 28): ST Engineering is expected to record earnings declines of 3% to 9% for FY20 to FY22, largely on the back of lower earnings contribution from its aerospace segment, according to RHB Securities.

Even in its worst case scenario, RHB estimates that ST Engineering could see only as much as an 8% decline in earnings in 2020 – nearly half of what the market is pricing in.

As at 1.11pm on Wednesday, all but three of the 30 STI constituent stocks trading lower.

SINGAPORE (Dec 26): Capital goods – which are used in producing other goods, rather than being bought by consumers – are on the cusp of a “strong recovery” in earnings growth, market watchers say.

SINGAPORE (Dec 18): Against an outlook that is “turning less cloudy”, DBS Group Research has advised investors to adopt a “barbell approach” to strike a balanced risk-reward.