CSE Global - UOB Kay Hian 2023-02-01: Earnings Accretive Acquisition & Major Contract Wins

• CSE Global (SGX:544) just acquired a US radio communication group for US$11m. We view this positively as the acquisition valuation appears attractive and is highly accretive as it could lift CSE’s 2023F earnings by around 20%, assuming Radio One Group’s 2022 earnings can be sustained.
• - Read this at SGinvestors.io -
• We raise our 2023F EPS forecast by 12% to factor in the positive developments. We also raise our target price for CSE by 22% to S$0.45 (14x 2023F PE). Upgrade CSE to BUY.

CSE announced acquisition of Radio One Group.

• - Read this at SGinvestors.io -
• The acquisition is part of CSE’s strategy to expand and grow its communication businesses in the infrastructure industry markets.

We view this positively as the acquisition valuation is attractive at around 4x 2022 P/E and is highly accretive as it could lift CSE’s 2023F earnings by S$3.6m or around 20%, assuming the 2022 earnings of Radio One Group can be sustained.

CSE announced winning of two major contracts worth S$87m.

• Read more at SGinvestors.io.

John Cheong UOB Kay Hian Research | Heidi Mo UOB Kay Hian | https://research.uobkayhian.com/ 2023-02-01 SGinvestors.io

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