S63.SI · SES · Industrials
Singapore Technologies Engineering Ltd
Also onConsensus Drift
Implied value per share
SGD 5.82
Market price
SGD 10.43
Implied upside
-44.2%
5-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case
Current EV/EBITDA of 38.8x sits outside a defensible 3-20x band, so the exit multiple is capped at 20.0x. A multiple that far out usually means EBITDA is the wrong denominator for this business.
Value Per Share
Same forecast, different terminal treatment. Percentages vs price.
Forecast Cashflows
Reporting currency (SGD). Outflows negative.
| Line | FY26 | FY27 | FY28 | FY29 | FY30 | CAGR |
|---|---|---|---|---|---|---|
| Revenue | SGD 13.7bn | SGD 15.2bn | SGD 16.9bn | SGD 18.7bn | SGD 20.8bn | +11.0% |
| EBIT | SGD 928.1m | SGD 1.0bn | SGD 1.1bn | SGD 1.3bn | SGD 1.4bn | +11.0% |
| NOPAT | SGD 790.5m | SGD 877.2m | SGD 973.5m | SGD 1.1bn | SGD 1.2bn | +11.0% |
| Add depreciation & amortisation | SGD 690.1m | SGD 765.8m | SGD 849.8m | SGD 943.0m | SGD 1.0bn | +11.0% |
| Less capital expenditure | SGD -901.7m | SGD -1.0bn | SGD -1.1bn | SGD -1.2bn | SGD -1.4bn | +11.0% |
| Less increase in working capital | SGD 56.2m | SGD 62.4m | SGD 69.2m | SGD 76.8m | SGD 85.3m | -11.0% |
| Free cashflow to firm | SGD 635.1m | SGD 704.8m | SGD 782.1m | SGD 867.9m | SGD 963.1m | +11.0% |
| Discount factor | 0.9687 | 0.9089 | 0.8528 | 0.8002 | 0.7509 | - |
| Present value | SGD 615.2m | SGD 640.6m | SGD 667.0m | SGD 694.5m | SGD 723.2m | +4.1% |
| Present Value Of The Forecast | SGD 3.3bn | |||||
Discount Rate
Source shown per component. All overridable above.
| Risk-free rate | 4.20% | USD assumption - no free live source available for this market (assumption) |
| Equity risk premium | 6.50% | Market assumption |
| Beta | 0.434 | Reported 0.155, pulled toward 1.0 (Blume) |
| Cost of equity | 7.02% | Risk-free + beta x equity risk premium |
| Cost of debt | 4.20% | Floored at the risk-free rate (implied cost of debt was lower) |
| Market capitalisation | SGD 32.5bn | 87.1% of capital |
| Total debt | SGD 4.8bn | 12.9% of capital, book value as a proxy |
| Tax rate | 14.8% | Effective, capped at statutory |
| WACC | 6.57% | E/V x Re + D/V x Rd x (1 - t) |
Terminal Value
Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.
Perpetuity growth at 2.50%
85% of EV
- Forecast FCFF, final year
- SGD 963.1m
- Capex at depreciation, working capital in reinvestment
- SGD 1.5bn
- Less reinvestment at g/ROIC (32.9% of NOPAT)
- SGD -495.1m
- Capitalised
- SGD 1.0bn
- ROIC (reported)
- 7.6%
- Terminal value, undiscounted
- SGD 25.4bn
- Terminal value, discounted
- SGD 19.1bn
- Enterprise value
- SGD 22.4bn
- Less net debt
- SGD 4.3bn
- Equity value
- SGD 18.1bn
Exit at 20.0x EBITDA
92% of EV
- Terminal value, undiscounted
- SGD 49.1bn
- Terminal value, discounted
- SGD 36.8bn
- Enterprise value
- SGD 40.2bn
- Less net debt
- SGD 4.3bn
- Equity value
- SGD 35.9bn
Spread between methods: 66%.
Sensitivity
Value per share (SGD) by discount rate and long-run growth.
| Long-run growth | |||||
|---|---|---|---|---|---|
| Discount rate | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
| 4.57% | 10.22 | 11.28 | 12.84 | 15.38 | 20.25 |
| 5.57% | 7.29 | 7.68 | 8.19 | 8.88 | 9.90 |
| 6.57% | 5.52 | 5.66 | 5.82 | 6.02 | 6.28 |
| 7.57% | 4.34 | 4.36 | 4.39 | 4.41 | 4.44 |
| 8.57% | 3.60 | 3.62 | 3.64 | 3.66 | 3.68 |
Outlined: this model. Green text: above today's price of 10.43. Shading: distance from this model's own value.
Priced In
What each input would have to be to justify the current price, one at a time.
| Input | Model | Implied | Gap |
|---|---|---|---|
| Revenue growth, every year | 11.0% | 22.9% | +11.9pp |
| EBIT margin | 6.8% | 11.8% | +5.0pp |
| Discount rate | 6.6% | 5.0% | -1.6pp |
Live formulas, not pasted numbers - edit a driver and the workbook reprices.
Yahoo Finance and RBA data. General information, not advice. Methodology.