Singapore's defence and aerospace giant is directly linked to NATO defence spending trends. With global defence budgets surging to all-time highs, ST Engineering is one of SGX's strongest structural stories.
ST Engineering (SGX: S63) is Singapore's largest defence and aerospace company, with operations spanning defence electronics, urban solutions, commercial aerospace MRO and satellite communications. It is one of very few SGX stocks with direct exposure to the global defence spending supercycle.
Global defence spending reached record levels in 2025–2026, driven by the Russia-Ukraine war, rising US-China tensions, and now the Iran conflict. NATO members are committed to spending 2% of GDP on defence — with several exceeding 3%. This creates a multi-year order backlog for defence electronics companies like ST Engineering.
ST Engineering's defence segment accounts for approximately 45% of revenues, with the remainder split between commercial aerospace (35%) and urban solutions (20%). The defence segment has the highest margins and longest order visibility.
| Cycle | Entry | Exit | Return | Signal trigger |
|---|---|---|---|---|
| 2020–2022 | Mar 2020 · SGD 2.90 | Sep 2022 · SGD 4.10 | +112% | NATO spend rise + PMI recovery |
| 2016–2018 | Jan 2016 · SGD 2.80 | Dec 2017 · SGD 3.90 | +39% | PMI above 52 |
ST Engineering's commercial aerospace division — one of Asia's largest independent MRO (maintenance, repair and overhaul) providers — is recovering strongly post-COVID. With Flying Hours at 104 (above pre-COVID baseline) and airline capacity constrained by narrow-body shortages, MRO demand is at record levels. ST Engineering has multi-year service agreements with Singapore Airlines, Lufthansa Technik and Delta Air Lines.
Through its iDirect and Glowlink subsidiaries, ST Engineering has a growing satellite communications business serving government and commercial customers. This segment is benefiting from increased defence and intelligence spending globally.