“This partnership is a major win for CSE, and could boost its data centre-related revenue from around 10% to potentially 30% annually,” say UOB Kay Hian analysts John Cheong and Heidi Mo in their Nov 12 report.
Maybank’s Jarick Seet believes the move is “significant” given that this is the first Singapore-listed company that Amazon has taken a stake in, and validates CSE as one of the US tech company’s key system integrators for their data centres.
In his Nov 11 report, Seet notes that a US$300 million($390.6 million) per year run-rate from Amazon is significantly higher than its existing US$40 million per year. This refers to the warrants being subject to vesting based on payments of up to US$1.5 billion over five years till Nov 9, 2030.
To Cheong and Mo, the sums are “significantly higher” than the year-to-date order win of around US$50 million with Amazon.
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While Seet also notes that the US$1.5 billion in potential orders could potentially double CSE Global’s orderbook from a single client, the analyst expects a gradual ramp-up in capacity. This is likely to start at US$200 million to US$250 million per year and accelerating in 2027 following its expansion phases.
Based on his estimates, CSE Global’s data centre contribution is projected to increase from 5% in FY2025 to over 30% by FY2027.
Cheong and Mo also believe the company’s electrification business stands to benefit from the growing data centre demand as the use of artificial intelligence (AI) increases, especially in the US.
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“In August 2025, CSE won a $59 million data centre extension order from its existing US hyperscaler client. In addition, CSE is in the qualification phase with more hyperscaler clients,” they note.
“To recap, CSE’s first data centre order win was only around $20 million in 2023, while the second order was $49 million in 2024, followed by $59 million in 2025. We believe the size of the contract wins will continue to increase due to more adoption of AI,” they add.
Looking ahead, Seet remains “bullish” on CSE’s outlook and sees potential for a multi-year growth story.
“The company expects to more than triple capacity by 2027/2028, and we believe it will secure another data centre client by 1QFY2026. Its 50% dividend payout guidance will provide shareholder stability alongside upside from the positive outlook,” he writes.
Seet has also raised his FY2026 and FY2027 patmi estimates by 9.5% and 17.6% to $43 million and $50 million respectively. His new target price is based on a higher FY2026 P/E of 20 times.
Cheong and Mo’s new target price represents an FY2026 P/E of 21 times as well as +1 standard deviation (s.d.) to mean, up from their previous P/E of 15 times. “[The higher target price] reflects the higher earnings potential from the new partnership and huge order indications from Amazon.”
With CSE currently trading at only 15 times its FY2026 P/E, Cheong and Mo believes valuations remain “undemanding” given the company’s exposure to the high-growth data centre space.
They have kept their earnings forecasts for now.
As at 9.37am, shares in CSE Global are trading 9.5 cents higher or 10.8% up at 97.5 cents, or 133.33% up year to date.
