Back in 2025, CSE Global’s management shifted order priorities toward data centres and general infrastructure while de-emphasising new greenfield water and wastewater projects given less attractive risk reward and commercial terms.
From Ng’s perspective, she sees electrification to remain as the key growth engine for CSE Global, supported by grid upgrades.
“Management highlighted sustained demand for power related work, driven by rising electricity consumption, grid upgrade needs and power intensive infrastructure such as LNG terminals, alongside an expected ramp in data centre activity from 2HFY2025,” says Ng.
Meanwhile, CSE Global’s communications segment is more recurring and run rate driven, supported by maintenance, time and materials work, rental and ongoing radio and network support, with growth led by the US and Australia.
See also: CGSI keeps “add” on Genting SG with the expectation of gradual earnings growth from 1QFY2026
“Its critical communications business has meaningful exposure to government-related entities, implying low substitution risk,” explains Ng.
At the same time, the analyst sees the Amazon partnership as a key catalyst for CSE Global.
“Amazon may acquire up to 62,968,580 CSE Global shares through 2030 via warrants at 76.7 cents per share, conditional on up to US$1.5 billion of orders over five years, implying about 8% ownership and $48.3 million proceeds to support its US expansion, reinforcing the group’s positioning in AI driven data centre buildouts,” Ng comments.
See also: RHB keeps ‘buy’ on HRnetGroup, citing its ability in ‘adding more value to customers’
Based on Ng’s DCF valuation, it implies a fair value of $1.40 per share on CSE Global, representing a 30.8% upside from the current price of S$1.07.
“The valuation is based on a 7.9% WACC and a 3.0% terminal growth rate. CSE Global currently trades at 9.4 times forward EV/EBITDA and 18.0 times forward P/E ratio.
As at 3.30pm, shares in CSE Global are trading down 3 cents, or 2.61% lower at $1.12.
