- CSE Global (SGX:544) beat consensus and our expectations (S$21m NPAT) with FY23 revenue rising 30% y-o-y to S$725m and NPAT surging 372% y-o-y to S$22.5m. Cash generated from operations improved significantly to S$72m from S$9m in FY22 and net gearing is now at 0.35x.
FY24E likely to perform well
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- Coupled with the normal run-rate flow, we expect FY24E revenue to grow 17% y-o-y to S$853m, due to strong backlog and recurring flow of projects.
- In addition, we expect net margin to continue to improve as seen in FY23 where net margin rose to 3.1% from 0.9% in FY22. We expect net margin to improve to 5% in the next 1-2 years on the back of strong 20% revenue CAGR.
Cashflow improved significantly – FY23 yield of 6.5%
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- CSE Global's dividend was maintained at S$2.75 cents for FY23, and we expect this to be sustainable going forward, which represents a yield of 6.5%.
Maintain BUY with S$0.71 target price
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