CSE Global - Maybank Research 2023-07-24: Riding Multiple Upcycles; Initiate Coverage With BUY

• 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

• - Read this at SGinvestors.io -
• 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.

Jarick Seet Maybank Research | https://www.maybank-ke.com.sg/ 2023-07-24 SGinvestors.io

---