CGS International
Date of Report: September 19, 2025
Scaling New Heights: CSE Global’s Strategic Expansion with US Hyperscalers and Data Centre Electrification

Overview: CSE Global Poised for Growth Amid US Hyperscale Data Centre Boom

CSE Global, a Singapore-based leader in Oil & Gas Equipment & Services, stands out as a top pick for investors seeking exposure to the surging data centre (DC) electrification sector. With the US firmly established as the world’s largest and most mature DC market, home to hyperscale giants like Amazon (AWS), Microsoft, Google, and Meta, CSE Global’s targeted strategy to capture this market is gaining momentum.
The company’s core expertise in modular electrical houses (e-houses) and substations, critical for hyperscale infrastructure, aligns perfectly with the explosive growth of AI and cloud workloads. As CSE Global expands its real estate footprint and orderbook, the company is well-positioned to deliver strong financial performance and shareholder returns in the coming years.

CSE Global’s Addressable Market and Opportunity in US Hyperscale Infrastructure

The US market for e-houses is projected at US$304m in 2024, expected to grow at a 4% CAGR to US$449m by 2033.
The US DC substation market is valued at US$3bn in 2024, with a 9% CAGR expected from 2025 to 2030.
CSE’s estimated total addressable market (TAM) for US DC electrification was approximately US$930m in 2024, with the company targeting 80% e-house and 20% substation segments.
Year-to-date (YTD), CSE secured approximately S$80m–90m in DC contracts, including S$59m in electrification orders.
Electrification order wins are forecast to reach S$65m–75m by end-FY25.

Capacity Expansion: Overcoming Land Constraints to Meet Explosive Demand

CSE currently operates with around 450,000 sq ft of fully utilized land for e-house and substation construction.
Plans are underway to expand capacity by 200,000 sq ft by end-FY25 to fulfill a 25% increase in contracted volume from existing hyperscaler clients and to accommodate new contracts.
Further expansion of 200,000–300,000 sq ft is anticipated in early 2026 to support continued customer growth and larger contracts.

Valuation and Shareholder Returns: Target Price and Investment Case

CGS International maintains an “Add” rating with an unchanged target price (TP) of S$0.86.
The TP is pegged to 15x FY26F P/E, which is 0.5 standard deviations above the 10-year average.
Key re-rating catalysts include large electrification order wins and operational margin (OPM) expansion.
Notable downside risks are cost overruns and a significant slowdown in order wins.

Financial Snapshot: Performance Highlights and Forecasts

Strategic Focus: Building Deeper Relationships with Hyperscalers

CSE Global’s strategy is sharply focused: targeting hyperscalers who build, own, and operate their own infrastructure. Unlike broader colocation markets, these partnerships involve longer sales cycles (1-2 years) but offer higher value and more strategic, long-term relationships. Hyperscalers typically require 200–300 MW per DC compared to 20–30 MW for colocation operators, enabling CSE to target higher-margin, bespoke opportunities.

Product Spotlight: E-Houses as the Backbone of Scalable Hyperscale Power

CSE delivers comprehensive DC electrification solutions, including switchgear, remote power panels (RPPs), busways, and prefabricated modular systems within electrical skids and e-houses.
E-houses enable rapid deployment via off-site assembly and testing, reducing construction time and on-site labor.
These solutions are vital for phased builds, remote deployments, or edge locations where speed, reliability, and optimized footprint are essential.
As hyperscalers deploy increasingly power-intensive AI workloads, e-houses have become mission-critical in scaling infrastructure while ensuring uptime and resilience.

Integrated Communications: Enhancing Operational Resilience

Through its subsidiary RFC Wireless, CSE Global also delivers advanced communications for DC environments:
Two-way digital radios
Push-to-talk over cellular (PTT)
CCTVs
Distributed antenna systems (DAS)
Private radio networks
These systems ensure uninterrupted, site-wide communications for operations, maintenance, and security, supporting real-time coordination and emergency response—even during power outages.

Competitive Edge: One-Stop-Shop for Hyperscaler Needs

CSE secured approximately S$80–90m in DC contracts YTD, including a S$59m electrification contract extension from a hyperscaler customer.
Communications contracts (S$20–30m) were won from two new hyperscaler clients, one via the RFC Wireless acquisition.
CSE’s ability to offer both electrification and communication solutions positions it ahead of single-solution providers, enabling the company to vie for more integrated, higher-value contracts.
DC contracts are expected to contribute 10–13% of the FY25 orderbook.

Key Customer Workflows and Orderbook Developments

CSE’s major DC customer relationships tend to progress from initial breakthroughs to sizable contract extensions over several years.
A standout is a long-term hyperscaler customer, with a US$36m extension in April 2024 (for 2025 delivery) and a US$46m extension in August 2025 (for 2026 delivery).
Land capacity is expected to expand from 450,000 sq ft to 650,000 sq ft for these contracts, with further expansions possible as new contracts are signed.
Acquisitions, such as RFC Wireless, have brought in new customers and diversified contract opportunities.

Peer Comparison: Industry Valuation Snapshot

ESG Performance: Progress and Challenges

CSE Global has maintained an LSEG overall ESG score of C since 2020.
2024 breakdown: Environmental C+ (13.9%), Social B- (39.8%), Governance D+ (46.3%).
The group’s GHG emission index improved by 12% YoY in 2024, exceeding its annual 1% reduction target.
CSE aims for a 10% improvement in GHG emission efficiency by 2030 (base year 2020).
Governance remains an area for improvement, impacted by factors such as low board gender diversity and limited SDG participation.

Ownership Structure and Market Metrics

Temasek Holdings is the largest shareholder with a 23% stake, followed by FMR LLC (4.4%) and Lim Boon Kheng (3.2%).
Market capitalization stands at S$522.4m (US$407.7m) with 674.6m shares outstanding and 71.4% free float.
Average daily turnover is S$4.52m (US$3.52m).

Conclusion: Investment Outlook

CSE Global is strategically positioned to ride the accelerating wave of US hyperscale data centre and AI infrastructure expansion. Its concentrated focus on hyperscalers, integrated electrification and communications offerings, and robust capacity expansion plans underpin a strong investment case. While cost and order win risks persist, the company’s expanding orderbook, increased operational scale, and improving ESG profile support a positive outlook for sustained shareholder value creation.

Recommendation Summary

Rating: Add (outperform, total return expected to exceed 10% over 12 months)
Target Price: S$0.86 (17.8% upside from current price)
Key Catalysts: Major electrification order wins, OPM expansion
Risks: Cost overruns, slowdown in order wins
CSE Global offers investors a compelling blend of growth, resilience, and sector leadership as the digital infrastructure revolution continues to unfold.