Sunday, February 5, 2017

ST Eng

Investment Thesis
1. Beneficiary of emphasis in defense in the region, Sg govt to continue to spend on defense.
2. Strong independent MRO for airlines, focusing on variety of services and conversions.
3. 4% FCF and dividend yield

Dec 16 sales SGD 6.6bn NP 460m Order book 11bn

PAT contribution
40% Aerospace
35% Electronics
10% Land
15% Marine

75% sales to Asia 25% to US

30-40% Defense related
ROE dropped from 25-30% to 20%

PL summary

MRO growth 4% CAGR and market size to reach US$100bn by 2025
2000 freighters needed for next 20 years, 1330 will be conversions

It recently acquired an additional 20% stake in Elbe Flugzeugwerke GmbH (EFW) to take its
total stake to 55%. EFW is a German firm which supplies composite flat panels to Airbus
and MRO services in Europe.

4% sales growth 6% OP growth
50% communications and sensors, 25% large scale systems, 25% software

Growth from cybersecurity and Smart Nation Solutions
Communications and sensors growing, leading supplier of Very Small Aperture Terminal (VSAT) with 32% market share and Satellite Network Solutions (SNS) bot iDirect in 2005 which helped.
Built first satellite in 2016

Called ST Kinetics
EBIT dropped to 2-3% from 6-7%
Impaired S$61m for Jiangsu Huran Kinetics - worst is over

Large SG govt contract
Sg govt defense budget 12bn

Largest MRO by man hours

STE - started as defense contractor but has leveraged its technical knowhow over the years to penetrate the commercial market. Global presence in 23 countries and 41 cities, and hires more
than 22,000 employees.

Defense sector over time down from 57% of revenues in 2002 to the 36%, with another 33% from government agencies and the balance from commercial businesses. M&A accounted for 40% of growth in last decade.

FCF 350-450m possible, NP flat for 10 years around 500m

Saturday, February 16, 2013

Friday, April 27, 2012

Singapore Tourism

13m tourists spending 22b sgd

Wednesday, November 16, 2011

China savings

USD 470 per worker in social safety net.

China needs to put more public money into social savings to encourage take off in private consumption.

Monday, October 10, 2011

China CPI basket

30% food
20% housing
But not prices, but mortgage interest rates and utilities

Sunday, October 9, 2011

China credit bubble impact to Singapore

DBS loan in 2Q 2011 $50bn
Ocbc $15bn
Uob $8bn

9% of residential property bought by Chinese

28% of all transactions by foreigners

Shadow banking in China S$815bn

60% to SMEs

Spas in Singapore

1200 spas and massage parlor in Singapore.

60 of them operate 24 hours.

Monday, September 19, 2011

Chinese internet

Online sales US$60bn

360buy sales US$1.6bn in 2010

Taobao to handle US$160bn in transaction in 2012

Taobao share dropped to 75%
Jingdong (360buy) is 4%

De Beers, Botswana, Diamonds

Botswana produces 21% of global diamond output
2/3 of De Beers output

Govt has 15% of De Beers JV in Botswana
Govt wants to have the right to sell 10% of diamond mined in the country
Currently De Beers is selling everything
US$480mn revenue from Diamonds - 2010 for Botswana

Sunday, September 18, 2011

Asia Investment Banking

UBS No.1 net rev US$574m
JPM US$573
DB US$409

UBS mkt shr 5%
UBS owns 20% of defunct Beijing Securities, has licence in China
can underwrite Chinese bonds and equities and trade equities

Investment banks staff churn 16% per yr

Thursday, September 15, 2011


2010, 160,000 patents (international)

US 28%
Japan 20%
Germany 11%
China 8%
Korea 6%
France 4%
UK 3%
Holland 2.5%
Swiss 2.2%
Sweden 1.9%
Denmark 1.9%
Others 15%

China YoY growth 56%
Korea 20%
Japan 8%
Germany 2%
US -2%

Net cash

Closing in on 50% of Jp co. are in net cash position


LNG import to Japan

Malaysia 20%
Australia 19%
Indonesia 18%
Qatar 11%
Russia 9%
Brunei 8%
UAE 7%
Oman 4%

US shale gas - target to import this

Unmarried men

In 2030, there will be 60mn men not being able to get married due to distorted male female ratio in Chin and India

New grad salaries in Sg 2011

Degree S$2700
Masters $3000

From ST


50% of marriages in Western countries end in divorce
50% of all children are born out of wedlock in Western countries

Mean age of marriage - 30 yrs old for women, risen sharply

20-30% of women will not get married in most Asian countries

Reason: women in the work 40 hrs, and do housework for another 30 hrs after marriage
men - only 3 hrs of housework

Thursday, August 18, 2011

Global smartphone market share

Global smartphone market share

Android 48%
iOS 19%
Symbian 17%
Rimm 11%
MSFT 2.4%

Saturday, August 6, 2011


Chinese CBA player earns 300-500k yuan or 50-80k USD

Top players earn 1 mn yuan

But NBA average salary 5 mn USD