ST Engineering eyes doubling smart city revenue to $1b by 2022

Its Newtec buy could give the business segment a boost.

ST Engineering’s smart city initiatives are expected to drive its growth in the long term as it aims to more than double its yearly revenues in the market to about $1b by 2022 from 2017, DBS Group Research reported.

In addition, its plans to buy Belgian satcom firm Newtec could position the firm better in the smart city market.

DBS estimated the projects within the Smart Nation framework to add up to over $1b in the near future, as the government pushes for smart technology usage across utility, healthcare, housing and transport spaces.

However, the firm could face pressure on its margins in the short term as it is expected to expand its network and presence in growth areas including smart city solutions, as well as boost its investments in research and development. Still, its sizeable orderbook of $15.9b and plans to acquire businesses can help mitigate this challenge.

Continued initiatives by its Aerospace segment, including the acquisition of nacelle systems provider MRA Systems, partnership with Airbus for passenger-to-freighter conversion of its jets, and expansion of its businesses, is also expected to propel its growth.

ST Engineering’s net profit rose 3.4% YoY to $139.14m in Q3, attributed to contributions from the Aerospace sector and others, whilst revenue jumped 27.2% to $2.07b over the same period.