STE’s Q1 Revenue Within Our Full Year Estimate, Supports Our Positive Outlook and SGD 4.82 FVE

ST Engineering's, or STE's, first-quarter 2022 revenue grew 13.4% year on year to SGD 2.0 billion, tracking within our full year estimate of SGD 8.9 billion, supporting our assumptions for a pickup in growth. There was immaterial contribution from U.S. toll road services provider TransCore, with the acquisition only completing in the latter half of March 2022. While there were no major surprises, the underlying update was largely positive as it appears the recovery in aircraft maintenance, repair and overhaul, or MRO, activities is at a slightly faster pace and could reach pre-pandemic level by end-2023, ahead of our 2024 estimate. Also, if revenue growth for its defense and public security segment maintains at the first quarter pace of 8%-9% year on year, there could be around a total 5% upside to our group revenue forecast in 2022 and 2023, although we think some of this upside may be currency related.