CSE Global

The best is yet to come for CSE Global, say analysts, as the group garnered four “buy” calls across brokerages DBS Group Research, CGS-CIMB Research, KGI Securities and RHB Group Research.

Barring a 4.7% decline in earnings to $5 million for 3QFY2019 ended September, the Mainboard-listed technology solutions provider posted a solid set of results across a number of other key financial metrics.

Revenue for the quarter surged 21.9% to $111.5 million, owing to higher contributions from the Americas and Asia-Pacific. Operating profit also registered a 2.3% growth to $7.1 million.

But CSE Global’s greatest asset rests in its robust order book: The group’s order intake from continuing operations nearly doubled to $156.1 million in 3QFY2019, from $80.3 million in 3QFY2018. Additionally, the order book stood at $232.6 million at the end of the quarter, representing a 71.5% y-o-y growth from $135.6 million.

While CSE Global has noted that industry conditions remain uncertain in view of ongoing trade tensions and a worldwide economic slowdown, analysts appear fairly certain that the group remains poised to thrive in the near term.

“New order intake almost doubled y-o-y, more than we anticipated, on the back of an increase in oil production in the Americas,” says DBS analyst Ling Lee Keng in a Nov 8 report. “With its increase in oil and gas projects, and a large contract win announced recently, we anticipate this to contribute positively to CSE’s earnings in FY2020F and beyond.”

Moving forward, CGS-CIMB Research analyst Cezzane See says CSE’s order backlog could soar to its highest in five years in FY2019F. “Assuming further order intake of $100 million and revenue recognition of $100 million in 4QFY2019F, CSE could end FY2019F with an order backlog of at least $300 million (compared with $232.6 million as at end-3QFY2019),” says See.