We initiate coverage on CSE Global (SGX:544) with a target price of S$0.62, pegged to a 17x blended FY23/24F P/E.
CSE Global is at an inflection point and we project profitability will surge by 250% y-o-y in FY23E on the oil and gas (O&G) upcycle and strong demand from datacentres and infrastructure projects in Australia and Singapore. Its order book stood at S$480m as at 31 Mar 2023 and we expect it to hit S$0900m by end-FY23E.
- Read this at SGinvestors.io -
Riding the O&G upcycle
In 1Q23, revenue from the energy segment increased 22% y-o-y to S$71m. We believe this trend will likely strengthen in 2H23 and the years ahead as CSE Global benefits from more O&G projects and as global O&G demand remains strong. Years of under-investment since the oil-price crash in 2015/16 means that capex is badly needed in the near future.
The next big thing – datacentres
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Currently, this segment contributes below 10% of revenue but we expect its contribution to surge to 30% in the next 3-5 years.
Orderbook likely to surge – more contracts incoming
Read more at SGinvestors.io.
Above is an excerpt from a report by Maybank Research. Clients of Maybank Securities may be the first to access the full PDF report @ https://www.maybanktrade.com.sg/.
