CSE Global - Maybank Research 2024-05-12: Electrifying The Way Forward; Solid 1Q Revenue Growth Of 24% Y-o-y

• 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

• - Read this at SGinvestors.io -
• 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.

Jarick Seet Maybank Research | https://www.maybank-ke.com.sg/ 2024-05-12 SGinvestors.io

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