Date of Report: 3 October 2024
Broker: UOB Kay Hian
Robust Order Pipeline
CSE Global continues to enjoy strong order wins, reporting an order intake of S$391 million in the first half of 2024. While this figure remains flat year-on-year, it signals a healthy order pipeline for the coming quarters.
Growing Orderbook
The company’s orderbook has reached S$692 million, representing a 33% year-on-year increase. The infrastructure segment constitutes the majority of the orderbook, accounting for 72%. This growth reflects CSE Global’s strategic focus on emerging trends in electrification and decarbonization.
Business Development Strategy
CSE Global is actively pursuing acquisitions in the critical communications space in the Americas region to enhance its growth strategy. The company is also focusing on data center and automation projects to seize emerging market opportunities.
Positive Financial Performance
CSE Global has reported stable financial performances in both the infrastructure and mining & minerals sectors. This stability is bolstered by a consistent stream of projects arising from global requirements in digitalization, physical and cyber security enhancements, and demands from data centers and water utilities in both the Americas and Asia-Pacific regions.
Investment Recommendation and Target Price
UOB Kay Hian maintains a “BUY” recommendation for CSE Global, with a target price of S$0.60. This target is based on a price-to-earnings (PE) ratio of 13x for 2024, which reflects a valuation of 1 standard deviation above the mean.
Key Catalysts for Growth
Key events that could drive CSE Global’s share price higher include:
- Winning large infrastructure projects.
- Successful acquisitions that enhance service capabilities.
- Increased demand for automation solutions in response to global market trends.
