ST Engineering’s net profit barely inches up by 2% to $127m in 2Q

On back of a one-off gain from its GJK divestment.

The engineering firm’s bottomline was boosted this time by a one-off gain, but its core profit remains weak due to disappointing earnings.

According to a report by Maybank Kim Eng, the muted outlook is reflected by the cut in profit guidance for the year and the stagnant order book.

“The stock’s stellar performance in recent months does not seem to reflect any fundamental improvement in its underlying business,” the report noted.

Meanwhile, without the $10.4m one-off gain from the divestment of GJK, its specialty vehicle business in China, net profit would have declined for the second consecutive quarter.

“Hence, we deem core earnings as below expectations. Order replenishment in the quarter wasn’t great as its orderbook remains largely unchanged at SGD11.6b (1Q16: SGD11.5b),” the report added.