Big and agile
■ With US domestic travel heading towards pre-Covid-19 levels, we expect
STE Commercial Aerospace to recover ahead of Singapore peer, SIE.
■ Airbus’s gradual production ramp-up is another driver for STE’s recovery as it benefits from nacelle and aircraft composite floor paneling production.
■ Order wins should remain strong for STE, judging from its 1Q21 achievement
(S$1.5bn). Relative to its Singapore industrial peers, this is a positive.
■ We lift our FY21-23F EPS by 5-6% to reflect stronger recovery in aerospace
and raise our TP to S$4.41 (blended DCF, CY22F P/E, dividend yield).