• AI giants have recently announced massive spending for data centres, and a Singapore-listed company, CSE Global, stands to benefit. • CSE is already working with Amazon, which is on track to place up an amazing USD1.5 billion of work with CSE over the next five years. It's a strong endorsement for CSE as a serious player in the US data centre market, the largest by far in the world. • CSE has been servicing Amazon for the last few years with prior contract sizes of US$40m–50m, according to CGS International. • Now CGS's bull case sees even more upside ahead: if CSE wins another two new clients (hyperscalers like Google) with c.US$40m electrification contracts awarded from each hyperscaler in FY26-27, its net profit could grow 34–43% to S$48m in FY26F and S$64m in FY27F. • Read excerpts of CGS's report below .... |
Excerpts from CGS report
Analysts: TAN Jie Hui & LIM Siew Khee
■ Reiterate Add with a higher TP of S$1.50, pegged to 19x FY27F P/E. |
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| AWS expansion supports DC electrification outlook |
In Amazon Web Services’ (AWS, AMZN US, NR, CP: US$209) latest earnings release in Feb 26, Amazon announced capex of US$200bn for FY26F, with the majority allocated to data centre (DC) development.
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CSE: Total contract wins in FY25F |
S$1.0 billion |
Earlier, in Nov 25, AWS also unveiled plans to invest up to US$50bn to build and deploy its first purpose-built AI and high-performance computing (HPC) infrastructure for the US government.
We believe these announcements further reinforce the medium-term demand outlook for DC electrification.
As capacity build-out accelerates across US government and hyperscale DC projects, CSE is well positioned to benefit from sustained order opportunities from AWS, in our view.
| Record-high order wins likely in 4Q25F and FY25F |
Key types of electrification projects by CSEWe expect 2H25F net profit to come in at c.S$18m (-18% yoy, +13% hoh), with EBIT margin flat hoh at c.5.5% (-1.8ppt yoy).
A key area of focus will be admin costs, which we estimate to rise to c.S$109m (c.23% of revenue, +32% yoy, +17% hoh).
In Dec 25, CSE announced two major order wins:
(i) three LNG electrification contracts worth S$162m, with execution spanning FY26F–FY28F, and
(ii) an Amazon electrification contract worth S$186m, scheduled for delivery in FY26F.
These awards lifted FY25F disclosed contract wins to S$861m.
Including c.S$150m of recurring flow contracts per quarter, we estimate 4Q25F order wins reached S$496m and total FY25F contract wins reached c.S$1bn, a record high, lifting the orderbook to c.S$762m.
We expect FY26F operating profit margin to expand by 1% pt to 6%, as the bulk of manpower additions (technical and engineering staff) and early equipment investments for the new 241k sq ft facility were front-loaded in FY25F.
Consequently, we forecast FY26F net profit growth of 30% yoy to S$44m.
We raise our FY26F/27F EPS forecasts by 4%/3%, driven by higher FY25F order win expectations. |
→ See CGS's full report here.
→ Read about another data centre play: ISDN: 1H25 Core Profit Jumps 35%, Powering Ahead with Automation and Hydropower
