Singapore Technologies Engineering is likely to benefit from its proposed divestment of a 51% stake in its joint venture with Singapore Power, RHB Research's Shekhar Jaiswal says in a report.

The proceeds will help reduce the technology, defense and engineering group's debt and slightly boost its earnings, the analyst says.

ST Engineering's planned stake divestment amounts to an estimated S$148 million, and will probably lead to one-off gain of around S$83 million.

Meanwhile, the company's record-high order book ensures strong revenue visibility, supported by structural tailwinds such as rising defense spending.

RHB raises the stock's target price to S$8.70 from S$8.65 with an unchanged buy rating.

Shares are 0.2% higher at S$8.42.