"CSE is well positioned to leverage the US hyperscale power boom and accelerate order wins in 2HFY2025," add the analysts, who have maintained their target price at 86 cents.
With the likes of so-called hyperscale providers the likes of Amazon, Microsoft, Google and Meta, the US is the world's largest and most mature data centre market.
"The demand for modular electrical houses and substations continues to accelerate, driven by the rapid expansion of hyperscale infrastructure," the analysts say.
The US modular electrical houses market is one estimated by Grand View Research to be worth US$304 million in 2024, and is seen to grow at a CAGR of 4% to US$449 million by 2033.
The US data centre substation market, on the other hand, is valued at US$3 billion in 2024, with a CAGR of 9% from 2025 to 2030.
Assuming that 80% of CSE’s data centre electrification products and services target the e-house segment and 20% address substations, the CGSI analysts estimate that CSE’s total addressable market for data centre electrification in the US was US$930 million in 2024.
Year to date, Lim and Tan estimate that the company has secured $80 to 90 million in data centre contracts, with electrification order wins contributing $59 million. They figure that data centre electrification order wins to grow to $65 and 75 million by the end of the current FY2025.
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Lim and Tan observe that in recent months, several US hyperscalers have announced major data centre and AI infrastructure expansion plans.
To support the rising power infrastructure demand from CSE’s existing hyperscaler clients, CSE will need to expand its real estate footprint, as it is currently facing land constraints for building additional e-houses and substations.
The company is now using 450,000 sq ft in fully utilised land and this is seen to grow by up to 300,000 sq ft by early FY2026 to accommodate growth requirements.
The CGSI analysts point out that with its ability to deliver both electrification and communication solutions—both critical for hyperscaler scalability - it is well positioned to differentiate itself from the competition and capture more integrated, high-value contracts.
Their target price of 86 cents is pegged to 15x FY2026 earnings, which is 0.5 sd. above its 10-year average.
CSE Global shares closed at 76 cents on Sept 22, up 4.14% for the day and up nearly 80% year to date.
