CSE Global leverages engineering experience, technology and diverse skill sets across its global network to design and build customised, integrated systems for clients that solve their problems. With highly attuned engineering capabilities at its core, the group, led by group managing director and CEO Lim Boon Kheng, has successfully delivered complex, large-scale projects amid challenging conditions. Its technologies are designed to reduce waste, allow for greener, smarter processes and are built to last.
1. What is CSE Global ’s business about, and what are some of your key business segments?
CSE Global is a global systems integrator where we combine different components of technology (hardware and software) into cohesive, integrated systems to ensure smooth operations. Electrification, communications and automation solutions form our three key business segments.
Our solutions are mission-critical as they support major operations, including power grids, manufacturing and data centres.
Some applications of our solutions include:
Electrification – Designing, engineering, procurement and integration of highly complex electrical distribution and power systems for data centres.
Communications – Designing state-of-the-art communications network systems to ensure safety, improve performance and maintain critical operations.
Automation – Setting up safety shutdown and production control systems.
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2. In FY2024, CSE Global revenue rose 18.8% y-o-y to $861 million, while net profit also grew. What are the key drivers of the performance and can this momentum be sustained?
We saw revenue growth across all business segments, particularly in the electrification (30% y-o-y) and automation (14.3% y-o-y) business segments. Major contracts secured in FY2023 and new projects secured in FY2024 significantly contributed to electrification revenue. The increase in order intake in the US, coupled with higher revenue recognition for ongoing projects in the US and the Asia Pacific region, supported automation revenue growth. Newly acquired subsidiaries contributed to the increase in communications revenue.
Despite the increase in operating expenses, the group’s operating profit and ebitda in FY2024 grew significantly by 41.3% and 29.1% y-o-y, respectively, driven by improved operating leverage with growth in revenue. Interest expenses were 15.9% lower y-o-y, decreasing from $10.7 million in FY2023 to $9.0 million in FY2024, due to improvement in working capital management. These contributed to the surge in FY2024 net profit and a 1.2 percentage point improvement in net profit margin to 4.3%, excluding the exceptional item of $10.4 million arising from the arbitration settlement.
CSE is well positioned to achieve a healthy financial performance this year with an order book of $672.6 million as at Dec 31, 2024.
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3. The group placed out 60 million shares to raise gross proceeds of $24 million. Can you share more about how these proceeds were utilised?
The net proceeds from the share placement completed in March last year are intended to finance, in part or whole, strategic acquisitions or investments to support business growth. Since then, we have acquired RFC Wireless Inc for about $14.3 million, which has enabled us to capitalise on the artificial intelligence (AI) megatrend and successfully penetrate the data centre communications market in the US. The remaining net proceeds have been earmarked for potential future acquisitions.
4. How do you see CSE Global’s business segments evolving over the next few years?
Electrification, communications and automation will remain our core business focus areas. We will continually expand our engineering capabilities and technology solutions to adapt to evolving market demands.
In the coming months, we will further expand our capacity, electrification and communications solutions, particularly for the data centre market, as we see contributions from this sector increasing over time. This is in line with JLL’s projections that the global data centre capacity will grow 15% annually until 2027, although this will be insufficient to meet growing demand.
We are also exploring additional premises in current and new geographies to support growth and further widen our market presence.
5. Does the group have any dividend policy?
The CSE Global board of directors recently announced the adoption of a dividend guidance that aims to provide shareholders with a target minimum annual dividend payout of 50% of the group’s consolidated net profit attributable to equity holders of the company in respect of future financial years ending Dec 31. This dividend guidance represents a balanced approach between providing immediate returns to shareholders while retaining sufficient earnings to fund future growth.
6. What are some recent acquisitions made by CSE Global and how do they benefit the group?
In February last year, we acquired Linked Group to expand our repertoire of electrification solutions to support electricity grids and renewables such as commercial solar energy systems and off-grid complexes. This enables us to leverage the rising demand for renewable energy solutions.
Subsequently, in August, we acquired RFC Wireless Inc, a provider of advanced communication solutions, from portable and mobile radios to wide area networks and infrastructure. This acquisition enabled us to capitalise on the AI megatrend and successfully penetrate the data centre communications market in the US.
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7. What are some emerging megatrends that benefit CSE Global? How does the group remain agile in seizing opportunities?
We believe the urbanisation, electrification, decarbonisation and AI megatrends present significant growth opportunities for CSE Global in our core markets — the US, the UK and the Asia Pacific region.
Urbanisation is a critical driver of infrastructure development. The World Bank projects that the global urban population will more than double by 2050, with nearly 70% of the world’s population residing in cities. This demographic shift will drive increased demand for critical infrastructure, including electrical distribution systems, communication networks and automation solutions, areas where CSE Global is uniquely positioned to provide comprehensive, end-to-end solutions.
Electrification and decarbonisation are integral to addressing climate change while meeting growing energy demands. The transition to renewable energy sources and the adoption of sustainable technologies, such as solar panels and electric vehicle (EV) charging infrastructure, is creating robust demand for our electrification solutions.
The rapid advancement of AI is driving unprecedented demand for data centre infrastructure, where CSE Global’s suite of solutions can be implemented to support the operations of such mission-critical facilities.
To capitalise on emerging opportunities, we have acquired and integrated over 40 value-accretive companies since inception to ensure we remain relevant to our clients, some of whom have been working with us for over 30 years. Our management approach, which includes local leaders, empowers local teams to respond swiftly to regional opportunities and ensures seamless execution of our growth strategy while maintaining operational excellence.
8. What are some potential risks that could affect the group’s business? How prepared is the group in mitigating these risks?
The current global economic outlook and inflationary pressures, coupled with ongoing supply chain disruptions and the geopolitical situation, continue to present uncertainties in the markets in which we operate.
Our localised operations in each of our key markets, which involve local procurement and human resources strategies, effectively mitigate risks associated with local regulatory changes while ensuring compliance. Market demand will continue to change but we are able to tailor our solutions for various applications to meet customer requirements.
9. How has the group incorporated sustainability practices in its daily operations?
We actively seek to minimise our carbon footprint and reduce energy consumption through a two-pronged approach. Firstly, we promote more sustainable workplace practices by encouraging a digital-first approach with our internal paper reduction guideline, implementing motion sensor lighting and energy-efficient bulbs, and performing routine energy performance assessments across our facilities to improve energy efficiency.
Additionally, we are phasing in EVs to reinforce our commitment to transitioning to cleaner energy sources. Together with the board, we continue to seek sustainability-related opportunities to strengthen business resilience.
10. What is CSE Global’s value proposition to its shareholders and potential investors? What do you think investors have overlooked?
In the field, we are known for our ability to remain relevant and create cost-effective solutions for customers through constant innovation and the adoption of new technology.
Over the years, we have honed our ability to integrate acquisitions across various geographies, creating synergies that drive our robust growth and strengthen our competitive edge. By leveraging the insights and best practices from each market, we foster innovation and consistently enhance our organisational capabilities. Consequently, we have successfully diversified our business within a relatively short period, emerging as a leading player in the electrification and communication sectors in our key markets.
As we continue to scale the business, we remain committed to delivering profitable growth and creating long-term value for shareholders through consistent dividend payouts.
10 in 10 – 10 Questions in 10 Minutes with SGX-listed companies
Designed to be a short read, 10 in 10 provides insights into SGX-listed companies through a series of 10 Q&As with management. Through these Q&As, management will discuss current business objectives, key revenue drivers as well as the industry landscape. Expect to find wide-ranging topics that go beyond usual company financials. This report contains factual commentary from the company’s management and is based on publicly announced information from the company. For more, visit sgx.com/research. For more company information, visit www.cse-global.com
Raphael Lim is an associate director of research and FinLit with the Singapore Exchange
