CSE Global - RHB Invest 2020-02-11: System Resilient Against Virus; Stay BUY

CSE GLOBAL LTD (SGX:544) | SGinvestors.io CSE GLOBAL LTD (SGX:544)

CSE Global - System Resilient Against Virus; Stay BUY

  • CSE Global (SGX:544) secured new orders worth SGD230m in 4Q19, bringing the full-year order intake to SGD580m.
  • With a sizeable orderbook of > SGD300m, we expect the company to continue performing well in FY20. We also anticipate FY19 net profit (recurring) to be in line with our SGD24m estimate.



Order intake of SGD230m in 4Q19.

  • This consists of SGD25m from the infrastructure sector, SGD16m from the mining sector and SGD190m from the oil & gas sector. Out of the SGD190m orders from the oil & gas sector, USD74.7m (SGD103.7m) were from two new projects in the Americas, which were announced on 29 Oct 2019.
  • The oil & gas sector’s order intake totalled SGD430m, up significantly from SGD218 in FY18. This has resulted in a total of SGD580m in new orders secured last year, marking a surge of 52% y-o-y from FY18’s SGD380.6m.


Impact of novel coronavirus (2019-nCoV).

  • We believe that the nCoV situation will have a minimum impact on the group’s business for now, as CSE Global does not have a significant presence in China. However, if the nCoV triggers a global epidemic, projects could be delayed or cancelled.


FY19 results to be in line.

  • CSE Global is likely to release its full-year results on the last week of February. 9M19 revenue and net profit of SGD295.2m (+7.7% y-o-y) and SGD15.6m (+6.8% y-o-y) were at 71% and 69% of our forecasts.
  • Our full-year net profit forecast (recurring) of SGD24m remains intact.
  • A final DPS of 1.5 SG cents is expected to be declared, as the group is committed to maintaining a full-year dividend of 2.75 SG cents per share, translating to an attractive yield of 5.2%. See CSE Global Dividend History.


Maintain BUY.






Jarick Seet RHB Securities Research | Singapore Research RHB Invest | https://www.rhbinvest.com.sg/ 2020-02-11
SGX Stock Analyst Report BUY MAINTAIN BUY 0.690 SAME 0.690



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