ST Engineering bags big-time contracts from 'defence-contract clients'

Their spending jumped by a CAGR of 4-5%.

According to Maybank Kim Eng, taking a look at STE’s non-MINDEF defence-contract customers, they too show evidence of an increasing trend of defence-related expenditure, which bodes well for STE.

Examples of such countries range from the larger, more developed countries like the USA and UK to countries like Sweden, Thailand, and most recently, Oman.

Here's more from Maybank Kim Eng:

Notably, the trend seems to have taken an upward surge after 2001, when the Sep 11 attacks in the US heightened calls for national security globally.

Post-Sep 11, defence expenditure for this group of countries grew by a CAGR of 4-5%, whereas pre-Sep 11 expenditure either dipped 2% or only grew by 2% depending on whether expenditure by the UK/US was stripped out.

Given the current political tensions originating from Korea, the Middle East, etc, we see no reason why this steady growth in defence expenditure would not continue into the near future.

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