SGX Market Strategist, Equity & Fixed Income, Singapore Exchange Ltd (SGX)

Geoff Howie

SGX Market Strategist, Equity & Fixed Income

Asia’s leading multi-asset exchange

Singapore Exchange Ltd (SGX)

Singapore Exchange is Asia’s leading and trusted market infrastructure, facilitating the exchange of capital and ideas to create value for people, businesses and economies. As a multi-asset exchange operating equity, fixed income and derivatives markets to the highest regulatory standards, SGX is a vertically integrated business that provides listing, trading, clearing, settlement, depository and data services.

With about 40% of listed companies and over 80% of listed bonds originating outside of Singapore as well as established linkages across the region and in Europe, SGX is Asia’s most international and connected exchange. Offering a full suite of derivatives products across Asian equity indices, commodities and currencies, SGX is the world’s most liquid international market for the benchmark equity indices of China, India, Japan and ASEAN.

As Asia’s pioneering central counterparty, SGX is globally recognised for its risk management and clearing capabilities, and was one of the first globally to adopt the Principles for Financial Market Infrastructure.

Headquartered in AAA-rated Singapore, SGX has over 800 employees including offices in Beijing, Chicago, Hong Kong, London, New York, Mumbai, San Francisco, Shanghai and Tokyo.

Equity Bottom-Up

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    <div class='content-caption'>CSE Global Ceo</div>
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<p>Systematic and detail-oriented by nature, Lim Boon Kheng appears to have found his calling in building enterprises.<br><br>
"My passion has always been to take a home-grown business and develop it into a multi-national company of decent size, with diversified revenues and good cashflows - one that can be sustained for many years," the Chief Executive Officer of SGX-listed IT systems integrator CSE Global Ltd said with a smile.<br><br>
"CSE started as a Singapore company. Our goal is to continue growing as a global organisation with predominantly non-Singapore revenue streams," Lim added.<br><br>
"I'm the third CEO of this organisation, and after me, there will be a fourth, fifth, or sixth. What's important is to lay the right foundation during my time so that my successors can take the business to the next stage."<br><br>
Lim, a Bachelor of Accountancy graduate from the National University of Singapore, joined CSE in 1999 as Group Financial Controller, after holding accounting positions with two other organisations. He was promoted to CSE's Group Managing Director and CEO in 2014.<br><br>
CSE began operations in 1985 as the engineering projects division of Chartered Electronics Industries, the electronics arm of the Singapore Technologies (ST) Group. It started building a regional footprint between 1992 and 1995, before undergoing a management buy-out in 1997, and was renamed CSE Systems &amp; Engineering Pte Ltd.<br><br>
In 1999, CSE Global made its trading debut on the then-Sesdaq second board. A year later, the Group embarked on its international expansion, acquiring companies in US, UK, Australia and Singapore, before transferring to SGX Mainboard.<br><br>
Today, the Group has more than 1,500 employees worldwide, with a network of 41 offices spanning the globe, and generates over 85% of its revenues outside the domestic market.<br><br>
It focuses on providing and installing a variety of control systems, as well as turnkey telecommunication network and security solutions, for the Oil &amp; Gas, Infrastructure and Mining industries.</p>

<p><strong>Reaping the Rewards</strong><br><br>
The Group services large, independent oil majors like BP, Shell, Exxon and Chevron, as well as national oil corporations such as Indonesia's Pertamina and Malaysia's Petronas. It derives more than 65% of revenues from the O&amp;G segment, with more than 90% of customers coming from the US. On the infrastructure side, clients include government agencies, utilities, ports, railways and airports.<br><br>
Over the last few years, CSE Global has extensively restructured its O&amp;G operations to focus on the Americas, jettisoning projects in the Middle East, Africa and Southeast Asia, which were plagued by severe price competition.<br><br>
"Although we're a small player, we were able to build good relationships with our O&amp;G customers over the years," Lim noted.<br><br>
"Previously, when oil prices were depressed and the industry was facing mounting challenges, any supplier that was prepared to invest time and effort to service clients - like we did - reaped the benefits," he added. "As a result, we were able to pick up market share."<br><br>
The industry's downturn and subsequent consolidation then also provided CSE with opportunities. "Through selective acquisitions, and by bringing in new talent from established operators and suppliers that downsized, our skillsets are much wider now than before," he noted.<br><br>
Those strategies are still relevant now, with crude prices hovering at four-year lows below US$30 a barrel. Global fuel demand has been hammered as many governments lock down their economies in a bid to curb the COVID-19 pandemic.<br><br>
"With the current decline in oil price, we now expect a lower order intake in the coming months as compared to the start of the year. Nonetheless, we intend to expand our market share over the next two to three years - especially in the US," Lim said.<br><br>
"Yes, there's gloom and doom in the O&amp;G sector, but we remain pretty optimistic about the medium-term outlook."<br><br>
CSE Global's infrastructure division - which accounts for more than 25% of overall sales - is witnessing a steady flow of orders for the next three to five years in Australia and Singapore.<br><br>
"There are constant requirements by these two governments to improve their infrastructure, whether for ports, railways, airports, power grids, or in Singapore's case - Smart Nation digital transformation initiatives," Lim said.<br><br>
"As a result, our infrastructure division will help to diversify the Group's revenue sources."<br><br>
Its Mining division, however, continues to face slower sales, as the sector remains in the doldrums amidst a protracted recovery.<br><br>
"Cyclical upgrades still need to be done - after all, systems do wear out and break down, while technologies and software have to be upgraded," he noted.<br><br>
"For some mining companies, capex and opex have been delayed for the past 24 to 36 months to the point where these upgrades are now inevitable. Hence, we expect some return to normalcy in terms of spending by clients in this sector."<br><br>
Order book-wise, CSE Global now has the highest order backlog in five years - standing at S$307.3 million as at 31 December 2019, up 70.5% year-on-year, supplemented in part by recent earnings-accretive acquisitions.</p>

<p><strong>Strategy U-Turn</strong><br><br>
So far, the coronavirus outbreak has not dealt a huge blow to the Group's operations, Lim said.<br><br>
"As more travel bans come into play and business continuity plans are activated on a large scale, it may affect our productivity and ability to service projects across jurisdictions," he added.<br><br>
"But the Group's business model of maintaining local teams in our markets will mitigate this issue to a large extent."<br><br>
Meanwhile, CSE Global will continue to beef up its geographical presence and technology offerings through acquisitions. In 2019, the Group spent more than S$60 million to buy four companies that boosted its service capabilities in the energy and mining industries.<br><br>
"We want to acquire companies with complementary solutions and services that will extend our range of offerings in the value chain and strengthen our local presence in those markets," Lim noted.<br><br>
"The target business usually needs to be earnings-accretive and generate good cashflows. Each year, we're looking to close between two and three acquisitions, depending on opportunities."<br><br>
Looking back, Lim attributes CSE Global's stronger fundamentals to a reversal of direction he implemented five years ago after taking the helm.<br><br>
"When the O&amp;G and mining industries were in their boom years, CSE Global became very focused on large projects at the expense of smaller ones. But I wanted a combination of both, and when I took over, we changed course and started to take on more small projects," Lim recalled.<br><br>
That decision delivered handsome rewards - 2019 revenue hit an all-time high of S$451.8 million, up 21% year-on-year, while full-year net profit jumped 19.6% to S$24.1 million. "If we had concentrated only on large projects, it might have had disastrous results," he admitted.<br><br>
"It was our small projects that saved the day - they boosted our cashflows, were faster to turn around and easier to manage. That's why it's critical that we do not just depend on any single engine of growth."<br><br>
Cash is always king, and even more so now with prevailing challenges in the industry. The Group ended 2019 with cash and bank balances of S$58.6 million.<br><br>
"Cashflows are the lifeblood of our organisation, which is why our strategies are focused on cash-generation and cost controls," he added.<br><br>
And when the 54-year-old is not strategising for the Group, he is spending time with his two sons and two daughters, aged five to 18. Family activities include eating, discussions over homework, and playing chauffeur to the kids.<br><br>
"I always impress upon my children the value of discipline and hard work," Lim noted.<br><br>
"In this life, nothing is given to you - you must work for what you want. Although that doesn't necessarily guarantee success, you still need to work hard, and then leave the rest to God."</p>

<p><strong>CSE Global Ltd</strong></p>

<p>Listed on Singapore Exchange since 1999, CSE Global is a global technologies company with an international presence spanning the Americas, Asia Pacific, Europe, Middle East and Africa. The Group has now more than 1,500 employees worldwide, and operates a network of 41 offices across the globe, generating more than 85% of its revenues outside its home market. The CSE Group of companies has been very successful in offering cost-effective, totally integrated solutions to industries in the Oil &amp; Gas, Infrastructure and Mining sectors.<br>
The company website is: <a href="http://edm.sgx.com/a/hBedCOmB86%24MfB91dB5AAAAAAcA/link7"><strong>www.cse-global.com</strong></a>.</p>

<p>Click <a href="http://edm.sgx.com/a/hBedCOmB86%24MfB91dB5AAAAAAcA/link8"><strong>here</strong></a> for the company's StockFacts page.</p>

<p>For the three months ended 31 December 2019 financial results, click <a href="http://edm.sgx.com/a/hBedCOmB86%24MfB91dB5AAAAAAcA/link9"><strong>here</strong></a></p>
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    CSE Global Ceo


Systematic and detail-oriented by nature, Lim Boon Kheng appears to have found his calling in building enterprises.  
"My passion has always been to take a home-grown business and develop it into a multi-national company of decent size, with diversified revenues and good cashflows - one that can be sustained for many years," the Chief Executive Officer of SGX-listed IT systems integrator CSE Global Ltd said with a smile.  
"CSE started as a Singapore company. Our goal is to continue growing as a global organisation with predominantly non-Singapore revenue streams," Lim added.  
"I'm the third CEO of this organisation, and after me, there will be a fourth, fifth, or sixth. What's important is to lay the right foundation during my time so that my successors can take the business to the next stage."  
Lim, a Bachelor of Accountancy graduate from the National University of Singapore, joined CSE in 1999 as Group Financial Controller, after holding accounting positions with two other organisations. He was promoted to CSE's Group Managing Director and CEO in 2014.  
CSE began operations in 1985 as the engineering projects division of Chartered Electronics Industries, the electronics arm of the Singapore Technologies (ST) Group. It started building a regional footprint between 1992 and 1995, before undergoing a management buy-out in 1997, and was renamed CSE Systems &amp; Engineering Pte Ltd.  
In 1999, CSE Global made its trading debut on the then-Sesdaq second board. A year later, the Group embarked on its international expansion, acquiring companies in US, UK, Australia and Singapore, before transferring to SGX Mainboard.  
Today, the Group has more than 1,500 employees worldwide, with a network of 41 offices spanning the globe, and generates over 85% of its revenues outside the domestic market.  
It focuses on providing and installing a variety of control systems, as well as turnkey telecommunication network and security solutions, for the Oil &amp; Gas, Infrastructure and Mining industries.

Reaping the Rewards  
The Group services large, independent oil majors like BP, Shell, Exxon and Chevron, as well as national oil corporations such as Indonesia's Pertamina and Malaysia's Petronas. It derives more than 65% of revenues from the O&amp;G segment, with more than 90% of customers coming from the US. On the infrastructure side, clients include government agencies, utilities, ports, railways and airports.  
Over the last few years, CSE Global has extensively restructured its O&amp;G operations to focus on the Americas, jettisoning projects in the Middle East, Africa and Southeast Asia, which were plagued by severe price competition.  
"Although we're a small player, we were able to build good relationships with our O&amp;G customers over the years," Lim noted.  
"Previously, when oil prices were depressed and the industry was facing mounting challenges, any supplier that was prepared to invest time and effort to service clients - like we did - reaped the benefits," he added. "As a result, we were able to pick up market share."  
The industry's downturn and subsequent consolidation then also provided CSE with opportunities. "Through selective acquisitions, and by bringing in new talent from established operators and suppliers that downsized, our skillsets are much wider now than before," he noted.  
Those strategies are still relevant now, with crude prices hovering at four-year lows below US$30 a barrel. Global fuel demand has been hammered as many governments lock down their economies in a bid to curb the COVID-19 pandemic.  
"With the current decline in oil price, we now expect a lower order intake in the coming months as compared to the start of the year. Nonetheless, we intend to expand our market share over the next two to three years - especially in the US," Lim said.  
"Yes, there's gloom and doom in the O&amp;G sector, but we remain pretty optimistic about the medium-term outlook."  
CSE Global's infrastructure division - which accounts for more than 25% of overall sales - is witnessing a steady flow of orders for the next three to five years in Australia and Singapore.  
"There are constant requirements by these two governments to improve their infrastructure, whether for ports, railways, airports, power grids, or in Singapore's case - Smart Nation digital transformation initiatives," Lim said.  
"As a result, our infrastructure division will help to diversify the Group's revenue sources."  
Its Mining division, however, continues to face slower sales, as the sector remains in the doldrums amidst a protracted recovery.  
"Cyclical upgrades still need to be done - after all, systems do wear out and break down, while technologies and software have to be upgraded," he noted.  
"For some mining companies, capex and opex have been delayed for the past 24 to 36 months to the point where these upgrades are now inevitable. Hence, we expect some return to normalcy in terms of spending by clients in this sector."  
Order book-wise, CSE Global now has the highest order backlog in five years - standing at S$307.3 million as at 31 December 2019, up 70.5% year-on-year, supplemented in part by recent earnings-accretive acquisitions.

Strategy U-Turn  
So far, the coronavirus outbreak has not dealt a huge blow to the Group's operations, Lim said.  
"As more travel bans come into play and business continuity plans are activated on a large scale, it may affect our productivity and ability to service projects across jurisdictions," he added.  
"But the Group's business model of maintaining local teams in our markets will mitigate this issue to a large extent."  
Meanwhile, CSE Global will continue to beef up its geographical presence and technology offerings through acquisitions. In 2019, the Group spent more than S$60 million to buy four companies that boosted its service capabilities in the energy and mining industries.  
"We want to acquire companies with complementary solutions and services that will extend our range of offerings in the value chain and strengthen our local presence in those markets," Lim noted.  
"The target business usually needs to be earnings-accretive and generate good cashflows. Each year, we're looking to close between two and three acquisitions, depending on opportunities."  
Looking back, Lim attributes CSE Global's stronger fundamentals to a reversal of direction he implemented five years ago after taking the helm.  
"When the O&amp;G and mining industries were in their boom years, CSE Global became very focused on large projects at the expense of smaller ones. But I wanted a combination of both, and when I took over, we changed course and started to take on more small projects," Lim recalled.  
That decision delivered handsome rewards - 2019 revenue hit an all-time high of S$451.8 million, up 21% year-on-year, while full-year net profit jumped 19.6% to S$24.1 million. "If we had concentrated only on large projects, it might have had disastrous results," he admitted.  
"It was our small projects that saved the day - they boosted our cashflows, were faster to turn around and easier to manage. That's why it's critical that we do not just depend on any single engine of growth."  
Cash is always king, and even more so now with prevailing challenges in the industry. The Group ended 2019 with cash and bank balances of S$58.6 million.  
"Cashflows are the lifeblood of our organisation, which is why our strategies are focused on cash-generation and cost controls," he added.  
And when the 54-year-old is not strategising for the Group, he is spending time with his two sons and two daughters, aged five to 18. Family activities include eating, discussions over homework, and playing chauffeur to the kids.  
"I always impress upon my children the value of discipline and hard work," Lim noted.  
"In this life, nothing is given to you - you must work for what you want. Although that doesn't necessarily guarantee success, you still need to work hard, and then leave the rest to God."

CSE Global Ltd

Listed on Singapore Exchange since 1999, CSE Global is a global technologies company with an international presence spanning the Americas, Asia Pacific, Europe, Middle East and Africa. The Group has now more than 1,500 employees worldwide, and operates a network of 41 offices across the globe, generating more than 85% of its revenues outside its home market. The CSE Group of companies has been very successful in offering cost-effective, totally integrated solutions to industries in the Oil &amp; Gas, Infrastructure and Mining sectors. 
The company website is: www.cse-global.com.

Click here for the company's StockFacts page.

For the three months ended 31 December 2019 financial results, click here



<p><i><b>These equity research reports are not written by the SGX.</b> SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</i></p><p>Singapore Company Guide</p>
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<h2>CSE Global</h2>
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<p><strong>Slightly disrupted flow</strong></p>
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<p><strong>Oil price plunge to only slightly impact Oil &amp; Gas business; cut growth assumption for FY20F to zero vs 10% previously.</strong> Despite the recent plunge in oil prices due to demand (COVID- 19) and supply (OPEC+ breakdown) factors, we expect minimal impact on CSE’s Oil &amp; Gas (O&amp;G) business as c.90% of its O&amp;G revenue is recurring in nature. CSE’s existing installed customer base automatically renew their contracts which expire every 1-2 years. These renewals are based on the longer-term outlook on oil price and are not affected by short-term volatility. The balance of c.10% is from the large contracts from O&amp;G and Infrastructure divisions that were already secured.</p>
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<p>We have revised down our assumed growth for its O&amp;G recurring business segment to 0%, from 10% previously. O&amp;G EBIT margin in FY2020F is lowered to 5.9% from 6.1%. We are maintaining our assumption of no new large order wins in FY2020F and FY2021F. As a result, FY2020F/21F earnings were cut by 7%/6%. Maintain BUY with a lower TP of S$0.65, with catalysts possibly coming from large infrastructure project wins.</p>
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<p><strong>Where we differ:</strong> We are more optimistic on the outlook for CSE, on the back of its strong order book organic growth as well as through acquisitions.</p>
<p><strong>Potential catalysts:</strong> 1) Large contract wins, 2) Recovery in oil price.</p>
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These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.Singapore Company Guide





CSE Global




Slightly disrupted flow




Oil price plunge to only slightly impact Oil &amp; Gas business; cut growth assumption for FY20F to zero vs 10% previously. Despite the recent plunge in oil prices due to demand (COVID- 19) and supply (OPEC+ breakdown) factors, we expect minimal impact on CSE’s Oil &amp; Gas (O&amp;G) business as c.90% of its O&amp;G revenue is recurring in nature. CSE’s existing installed customer base automatically renew their contracts which expire every 1-2 years. These renewals are based on the longer-term outlook on oil price and are not affected by short-term volatility. The balance of c.10% is from the large contracts from O&amp;G and Infrastructure divisions that were already secured.













We have revised down our assumed growth for its O&amp;G recurring business segment to 0%, from 10% previously. O&amp;G EBIT margin in FY2020F is lowered to 5.9% from 6.1%. We are maintaining our assumption of no new large order wins in FY2020F and FY2021F. As a result, FY2020F/21F earnings were cut by 7%/6%. Maintain BUY with a lower TP of S$0.65, with catalysts possibly coming from large infrastructure project wins.




Where we differ: We are more optimistic on the outlook for CSE, on the back of its strong order book organic growth as well as through acquisitions.
Potential catalysts: 1) Large contract wins, 2) Recovery in oil price.







Non-SGX Report: Singapore Company Guide: Slightly Disrupted Flow

<p><i><b>These equity research reports are not written by the SGX.</b> SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</i></p><div>
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<p>Singapore Company Guide</p>
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<h2>CSE Global</h2>
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<p><strong>Strong order continues</strong></p>
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<p><strong>Maintain positivity on CSE’s FY2020F outlook on strong order book.</strong> CSE’s strong performance was seen in both its inorganic growth (Volta and RCS Telecommunication acquisitions) and its organic growth of flow projects. Its large Oil &amp; Gas contract win in 4Q19 added to the strong base and will contribute positively from FY2020F.</p>
<p><strong>Strong orderbook.</strong> CSE’s strong order book of S$307.3m and its FY2019 revenue consisting of 95% from flow projects reaffirms our view of its anticipated strong performance heading into FY2020F. Should the COVID-19 situation improve and oil prices recover, we could see an upside from potential large contract wins in Oil &amp; Gas business in the US.</p>
<p><strong>Where we differ:</strong> We are more optimistic on the outlook for CSE, on the back of its strong order book organic growth as well as through acquisitions.</p>
<p><strong>Potential catalysts:</strong> 1) Large contract wins, 2) Recovery in oil price.</p>
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These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.



Singapore Company Guide




CSE Global




Strong order continues




Maintain positivity on CSE’s FY2020F outlook on strong order book. CSE’s strong performance was seen in both its inorganic growth (Volta and RCS Telecommunication acquisitions) and its organic growth of flow projects. Its large Oil &amp; Gas contract win in 4Q19 added to the strong base and will contribute positively from FY2020F.
Strong orderbook. CSE’s strong order book of S$307.3m and its FY2019 revenue consisting of 95% from flow projects reaffirms our view of its anticipated strong performance heading into FY2020F. Should the COVID-19 situation improve and oil prices recover, we could see an upside from potential large contract wins in Oil &amp; Gas business in the US.
Where we differ: We are more optimistic on the outlook for CSE, on the back of its strong order book organic growth as well as through acquisitions.
Potential catalysts: 1) Large contract wins, 2) Recovery in oil price.

















Non-SGX Report: CSE Global: Strong Order Continues

<p><i><b>These equity research reports are not written by the SGX.</b> SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</i></p><p>Singapore Company Guide&nbsp;</p>
<h2>CSE Global&nbsp;</h2>
<p><strong>New order intake picking up&nbsp;</strong></p>
<p><strong>Higher order book to drive earnings for FY20F and beyond.</strong> <br>New order intake almost doubled y-o-y, more than we anticipated, on the back of an increase in oil production in Americas. Excluding newly acquired Volta’s contribution, we estimate that CSE’s new order book in 3Q19 grew by c.40% y-o-y and c.5% q-o-q. With its increase in oil &amp; gas projects, and large contract win announced recently, we anticipate this to contribute positively to CSE’s earnings in FY20F and beyond.&nbsp;</p>
<p>We project FY19F-21F earnings CAGR of 21% for CSE, driven by the expected increase in capex of oil majors, and riding on the smart nation initiatives in Singapore and increasing infrastructure projects in Australia. About 90% of CSE’s total revenue is generally recurring in nature. This stable stream of revenue, coupled with its high customer retention rate and strong operating cashflows, should support a consistent DPS of c.2.75 Scts p.a., or an attractive yield of c.5%.</p>
<p><strong>Where we differ:</strong> <br>We are more optimistic on the outlook for CSE, on the back of higher new order wins driven by continued increase oil production in the US.</p>
<p><strong>Potential catalysts:</strong> <br>1) Large contract wins, 2) Rising oil prices&nbsp;</p>

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.Singapore Company Guide&nbsp;
CSE Global&nbsp;
New order intake picking up&nbsp;
Higher order book to drive earnings for FY20F and beyond.  New order intake almost doubled y-o-y, more than we anticipated, on the back of an increase in oil production in Americas. Excluding newly acquired Volta’s contribution, we estimate that CSE’s new order book in 3Q19 grew by c.40% y-o-y and c.5% q-o-q. With its increase in oil &amp; gas projects, and large contract win announced recently, we anticipate this to contribute positively to CSE’s earnings in FY20F and beyond.&nbsp;
We project FY19F-21F earnings CAGR of 21% for CSE, driven by the expected increase in capex of oil majors, and riding on the smart nation initiatives in Singapore and increasing infrastructure projects in Australia. About 90% of CSE’s total revenue is generally recurring in nature. This stable stream of revenue, coupled with its high customer retention rate and strong operating cashflows, should support a consistent DPS of c.2.75 Scts p.a., or an attractive yield of c.5%.
Where we differ:  We are more optimistic on the outlook for CSE, on the back of higher new order wins driven by continued increase oil production in the US.
Potential catalysts:  1) Large contract wins, 2) Rising oil prices&nbsp;

Non-SGX Report: CSE Global: New Order Intake Picking Up

<p><em><strong>These equity research reports are not written by the SGX.</strong> SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.</em></p>
<h2>CSE Global</h2>
<p>New order intake picking up</p>
<p><strong>Higher order book to drive earnings for FY20F and beyond.&nbsp;</strong></p>
<p>New order intake almost doubled y-o-y, more than we anticipated, on the back of an increase in oil production in Americas. Excluding newly acquired Volta’s contribution, we estimate that CSE’s new order book in 3Q19 grew by c.40% yo-y and c.5% q-o-q. With its increase in oil &amp; gas projects, and large contract win announced recently, we anticipate this to contribute positively to CSE’s earnings in FY20F and beyond.</p>
<p>We project FY19F-21F earnings CAGR of 21% for CSE, driven by the expected increase in capex of oil majors, and riding on the smart nation initiatives in Singapore and increasing infrastructure projects in Australia. About 90% of CSE’s total revenue is generally recurring in nature. This stable stream of revenue, coupled with its high customer retention rate and strong operating cashflows, should support a consistent DPS of c.2.75 Scts p.a., or an attractive yield of c.5%.</p>
<p><strong>Where we differ:&nbsp;</strong> We are more optimistic on the outlook for CSE, on the back of higher new order wins driven by continued increase oil production in the US.</p>
<p><strong>Potential catalysts: </strong>1) Large contract wins, 2) Rising oil prices</p>

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please refer to the Disclaimer in the attached report.
CSE Global
New order intake picking up
Higher order book to drive earnings for FY20F and beyond.&nbsp;
New order intake almost doubled y-o-y, more than we anticipated, on the back of an increase in oil production in Americas. Excluding newly acquired Volta’s contribution, we estimate that CSE’s new order book in 3Q19 grew by c.40% yo-y and c.5% q-o-q. With its increase in oil &amp; gas projects, and large contract win announced recently, we anticipate this to contribute positively to CSE’s earnings in FY20F and beyond.
We project FY19F-21F earnings CAGR of 21% for CSE, driven by the expected increase in capex of oil majors, and riding on the smart nation initiatives in Singapore and increasing infrastructure projects in Australia. About 90% of CSE’s total revenue is generally recurring in nature. This stable stream of revenue, coupled with its high customer retention rate and strong operating cashflows, should support a consistent DPS of c.2.75 Scts p.a., or an attractive yield of c.5%.
Where we differ:&nbsp; We are more optimistic on the outlook for CSE, on the back of higher new order wins driven by continued increase oil production in the US.
Potential catalysts: 1) Large contract wins, 2) Rising oil prices

Non-SGX Report: CSE Global (CSE SP): New Order Intake Picking Up

Singapore

CSE Global Limited provides systems integration and information technology solutions, computer network systems, and industrial automation.  The Company also designs, manufactures, and installs management information systems. CSE Global develops, manufactures, and sells electronic and micro processor monitoring equipment.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
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CSE Global Ltd (CSE SP)

CSE Global Charts Expansion Roadmap

Systematic and detail-oriented by nature, Lim Boon Kheng appears to have found his calling in building enterprises. "My passion...

Singapore Exchange Ltd (SGX)

Non-SGX Report: Singapore Company Guide: Slightly Disrupted Flow

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please...

Singapore Exchange Ltd (SGX)

Non-SGX Report: CSE Global: Strong Order Continues

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please...

Singapore Exchange Ltd (SGX)

Non-SGX Report: CSE Global: New Order Intake Picking Up

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please...

Singapore Exchange Ltd (SGX)

Non-SGX Report: CSE Global (CSE SP): New Order Intake Picking Up

These equity research reports are not written by the SGX. SGX supports the distribution of the research reports by external contributors. Please...

Singapore Exchange Ltd (SGX)

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