The strong driver came from its electrification segment, which was up 50% y-o-y to $146 million, with further growth ahead thanks to major data centre contracts in the Americas, which together account for $178 million in new order intake, which is two-thirds of the company's total of $271 million.
As at March 31, its orderbook of $716 million.
Revenue growth was also supported by the communications segment, which was up 19% y-o-y to $69 million with contributions from Australia and New Zealand.
Yeo expects the company to book stronger revenue in the second half of the year as execution ramps up.
"CSE continues to grow its electrification segment by strengthening its position in data centres through adding new industrial space, the purchase of new property, and the construction of buildings," he says.
Yeo warns that start-up costs of new facilities are expected to impact profitability momentarily, which will lead to a weaker 1HFY2026.
"However, we believe that this will be temporary, as a ramp up in execution and revenue recognition can be expected from 2HFY2026," he says.
See also: JP Morgan retains overweight recommendation for MLT with a lower price target
Yeo has applied a higher valuation multiple of 26x FY2027 to FY2028, up from 22x FY2026, to be in line with the company's international peers, leading to the higher target price of $1.94.
"We believe CSE’s re-rating is a combination of the strong data centre outlook in the US, buoyed by stronger sentiment for artificial intelligence and cloud computing, as well as stronger anticipated fund flows into the Singapore market," he says.
"We believe CSE’s recently announced strategic review could enhance shareholder value over the longer term," he adds.
CSE Global shares, as at 10.10 am, was the third most heavily traded counter, with a gain of 10.32% to change hands at $1.71.
