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

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.
<h2>CSE Global&nbsp;</h2>
Well-Oiled for the Upflow
<ul>
<li>Initiate coverage with BUY and 39% potential upside to S$0.65 TP</li>
<li>Earnings CAGR of 15% from FY19F-21F supported by stable, high recurring revenue; attractive yield</li>
<li>Beneficiary of expected increase in capex of oil majors • Riding on smart nation initiatives in Singapore; increasing infrastructure projects in Australia</li>
</ul>
Earnings growth supported by stable, high recurring revenue; attractive yield.&nbsp;We project FY19F-21F earnings CAGR of 15% 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 2.75Scts p.a, or attractive yield of c.6%.
Benefitting from expected increase in capex of oil majors; margins expansion from undertaking more profitable projects.&nbsp;With oil prices stabilizing above US$50/bbl in the past one year (breakeven for crude oil: c.US$40/bbl) and an optimistic outlook on the demand for oil in the long term, the collective capex of the four oil majors are expected to grow at a CAGR of c.11% from 2Q19 to FY21F. In addition, its focus on more profitable projects in U.S. and margins-accretive acquisition will lift earnings.
Riding on smart nation initiatives in Singapore; Increasing infrastructure projects in Australia.&nbsp;CSE will be pursuing more Singapore government projects to capitalize on the smart nation initiatives. In Australia, more infrastructure projects in fast-growing cities should lead to a growing demand for provision and installation of a variety of control systems as well as turnkey telecommunication network and security solutions, in which CSE specializes.

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&nbsp;
Well-Oiled for the Upflow

Initiate coverage with BUY and 39% potential upside to S$0.65 TP
Earnings CAGR of 15% from FY19F-21F supported by stable, high recurring revenue; attractive yield
Beneficiary of expected increase in capex of oil majors • Riding on smart nation initiatives in Singapore; increasing infrastructure projects in Australia

Earnings growth supported by stable, high recurring revenue; attractive yield.&nbsp;We project FY19F-21F earnings CAGR of 15% 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 2.75Scts p.a, or attractive yield of c.6%.
Benefitting from expected increase in capex of oil majors; margins expansion from undertaking more profitable projects.&nbsp;With oil prices stabilizing above US$50/bbl in the past one year (breakeven for crude oil: c.US$40/bbl) and an optimistic outlook on the demand for oil in the long term, the collective capex of the four oil majors are expected to grow at a CAGR of c.11% from 2Q19 to FY21F. In addition, its focus on more profitable projects in U.S. and margins-accretive acquisition will lift earnings.
Riding on smart nation initiatives in Singapore; Increasing infrastructure projects in Australia.&nbsp;CSE will be pursuing more Singapore government projects to capitalize on the smart nation initiatives. In Australia, more infrastructure projects in fast-growing cities should lead to a growing demand for provision and installation of a variety of control systems as well as turnkey telecommunication network and security solutions, in which CSE specializes.

Non-SGX Report: CSE Global: Initiation Report

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.

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CSE Global Ltd (CSE SP)

Non-SGX Report: CSE Global: Initiation Report

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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