Broker: Maybank Research Pte Ltd
Date of Report: July 17, 2025

CSE Global: Positioned to Ride the Trump AI Wave and Singapore’s Data Centre Boom

Overview: CSE Global Set for Multi-Year Growth as AI and Energy Investments Surge

CSE Global (CSE SP), a Singapore-based integrated systems solution provider, is emerging as a clear beneficiary from a confluence of powerful market drivers. Key among them are a newly announced USD70 billion US investment in artificial intelligence (AI) and energy infrastructure, together with Singapore’s SGD5 billion Monetary Authority of Singapore (MAS) scheme, both of which are set to accelerate demand for the company’s expertise in data centres, energy, and utility infrastructure.

Maybank Research maintains a BUY recommendation on CSE Global with a target price (TP) of SGD 0.70, representing an 18% upside from the current share price of SGD 0.63.

Key Catalysts: US and Singapore Investment Programs Fuel Growth Momentum

Recent policy moves in the US, including a USD70 billion commitment to AI and energy, are expected to drive rapid expansion in data centre construction, power generation, and grid upgrades. CSE Global, already gaining traction with one of the largest US data centre operators and qualifying for additional major clients, is strategically positioned to capture this growth.

Simultaneously, Singapore’s MAS is launching a SGD5 billion liquidity and market valuation boost program by the end of the year, earmarking CSE Global as a likely key beneficiary. This is expected to lift sector valuations, especially for Singapore’s small- and mid-cap (SMID) companies, with CSE well placed to secure larger government-backed contracts.

Order Book Strength and Project Pipeline: Data Centre and Utility Projects Set to Accelerate

• Strategic focus on data centre and utilities clients has led CSE Global to reserve capacity, ensuring robust order fulfillment capability.
• Margins are projected to remain resilient, underpinned by management’s back-to-back pricing arrangements with suppliers, insulating the business from potential tariff shocks.
• Order wins are expected to surge in Q3 2025, particularly for US data centre-related projects, along with larger Singapore government orders.

As of September 30, 2024, CSE Global’s order book stood at a healthy SGD 633.6 million, providing strong revenue visibility.

Expansion Plans: Aggressive US Capacity Growth and Dividend Stability

• Management expects to more than triple US capacity by 2027/28, contingent on continued success in securing large-scale orders.
• CSE Global maintains a 50% dividend payout ratio, providing attractive income stability for shareholders and supporting long-term investor confidence.

Financial Performance: Robust Growth Trajectory and Attractive Valuation

• Strong revenue and net profit growth are expected through 2027, with core net profit forecasted to rise 33.6% YoY in FY25E and a 10% CAGR thereafter.
• Net gearing is expected to decrease substantially, with the company projected to move to a net cash position by FY26E.
• Dividend payout is expected to remain robust at around SGD 0.0275 per share.

Valuation and Shareholder Returns: Discount to Peers and Strong Upside

• CSE Global trades at a notable discount to its sector peers, supporting the investment case for a value-driven re-rating.
• Attractive dividend yield, exceeding 6% in recent years, coupled with strong earnings growth, underpins total shareholder return potential.
• Share price performance has been resilient, with a 52-week high/low of SGD 0.63/0.39 and a market capitalisation of SGD 441.8 million.
• Major shareholders include Heliconia Capital Management (22.6%), CSE Global Ltd. (4.4%), and Fidelity Management & Research Co. LLC (4.1%).

Business Model, ESG Initiatives, and Risk Factors

CSE Global operates as a global systems integrator across energy, infrastructure, and mining sectors. The company is placing greater emphasis on sustainability, adopting Task Force on Climate-Related Financial Disclosures (TCFD) roadmaps and negotiating Sustainability Linked Loans. Notable ESG highlights include:

• Reduction in paper consumption index from 76.6 kg/SGD million in FY20 to 12.9 kg/SGD million in FY22.
• Efforts to measure and reduce Scope 3 emissions and implement green technologies, including energy-efficient equipment, LED lighting, and solar power.
• 25% female representation on the board, with all non-executive directors being independent.
• Commitment to zero confirmed incidents of corruption, supported by a whistle-blowing policy and risk assessment frameworks.
• Active engagement in community support, such as donations to Yellow Ribbon Singapore and employee bursaries.

Key risks include supply chain disruptions, potential cost overruns on projects, macroeconomic downturns affecting order flows, and foreign exchange volatility due to global operations.

ESG Quantitative and Qualitative Performance

CSE Global’s overall ESG score stands at 76, above the sector average, reflecting a solid framework and tangible medium to long-term targets, but with ongoing need for improvement in quantitative “E” metrics.

Financial Ratios and Operational Highlights

• Revenue growth is projected at 6-7% per annum through FY27E.
• EBITDA margin expected to increase from 2.1% in FY23A to 5.0% in FY27E.
• Net profit margin to rise steadily from 3.1% in FY23A to 4.1% in FY27E.
• Cash conversion cycle to improve from 35.4 days in FY23A to just 5.4 days in FY27E.
• Net gearing to shift from 35.2% in FY23A to net cash by FY26E.

Investment Thesis: CSE Global’s Compelling Upside

• Strong NPAT growth—250% in FY23E and 30% YoY in FY24E—positions CSE for a share price re-rating.
• Robust dividend yield, trading discount to peers, and exposure to the US O&G upcycle enhance the investment case.
• Potential further M&A activity and US data centre growth provide additional upside levers.
• Key risks: execution missteps, economic downturn, and FX fluctuations.

Conclusion: A Clear Beneficiary of Global AI and Energy Investment Cycles

With a resilient business model, strong order book, solid financials, and commitment to sustainability, CSE Global stands out as a compelling investment for exposure to the AI, energy, and infrastructure megatrends shaping both the US and Asian markets. Maybank Research’s target price of SGD 0.70 reflects confidence in CSE Global’s ability to capitalize on multi-year growth opportunities while delivering attractive shareholder returns.