CSE Global (SGX:544) is on track to deliver better quarters ahead and remains one of our conviction picks as a rare proxy for electrification/AI/data centres. Maintain BUY.
Solid 1Q revenue growth of 24% y-o-y
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With better operating leverage due to strong revenue growth, as witnessed in FY23, we believe margins should continue to improve from 3.1% In FY23 to 3.5-4.0% in FY24E. This would justify our 26% core FY24E EPS growth.
Net margins likely to improve
As CSE Global's revenue grew by 24% y-o-y in 1Q24, we expect subsequent quarters to be higher as seasonally 1Q has been its weakest quarter.
- Read this at SGinvestors.io -
A key beneficiary of AI boom and data centres
CSE Global’s recent S$49.2m plant extension is for the design, engineering, fabrication, installation and integration of power management systems and solutions for data centres in the US. We think its client is one of a handful of main cloud providers in the US and believe it will likely win more data centre contracts from existing and new customers.
AI technology and data centres require huge amounts of energy to develop and run and will benefit power management system integrators like CSE Global.
Potential buybacks and accretive acquisitions
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/.
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