CSE Global - Slower Path To Recovery
- CSE Global (SGX:544) posted a 1Q22 revenue of S$119m (-1% q-o-q, +6% y-o-y), in line with our and Bloomberg consensus’ estimates at 24% of FY22F forecasts. Strong infra revenue helped to offset weaker energy performance
- CSE Global achieved record-high quarterly order wins of S$232m in 1Q22 (+77% q-o-q, +119% y-o-y); previous high was S$230m in 4Q19.
- Supply chain disruptions will continue to be a key concern in 1H22. Management shared that equipment deliveries have been delayed by 3-4 months on average. CSE Global also sees a lack of large greenfield O&G opportunities despite elevated oil prices.
- Management expects 1H22 financial performance to remain challenging, before improving in 2H22. We factor in lower segment margins in view of continued supply chain disruptions and inflationary cost pressures; our FY22-24 EPS forecast is lowered by 3-11%.
- Despite margin pressures, we believe that CSE Global’s earnings visibility should be supported by its strong order book. We keep our ADD call on CSE Global with a lower target price of S$0.54, still based on 12x FY23F P/E (10-year average).
Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.
Kenneth TAN CGS-CIMB Research | LIM Siew Khee CGS-CIMB Research | https://www.cgs-cimb.com 2022-05-18 2022-05-18
Previous report by CGS-CIMB:
2021-11-11 CSE Global - Diversification Cushions Risks
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