CSE GLOBAL: Temasek-Backed Company Eyes Capacity Tripling as AI Power Needs Soar

THE CONTEXT

• CSE Global stock (72 cents this morning) has surged +73% year-to-date as it rides the wave of Artificial Intelligence, a transformative force shaping the global economy.

CSE, a Singapore-based company, is helping to power the backbone of AI -- data centres (DC) -- and the US is the world's largest (with reportedly 5,500 data centres or 10X more than the closest peer) and most advanced data center market.

• CSE, in which Temasek Holdings holds the No.1 stake (~23%), is engaged in projects that enhance electrical infrastructure, which includes working on substations, switchgear, switchboards, and transformers. These projects are crucial as power needs increase.

• The 1H2025 order book is set to be boosted as CSE is likely to win large data centre-related contracts before 2025 is over, says Maybank Kim Eng Securities in a new report.

orderbook6.25

Electrification segment accounted for S$292 m of the 1HFY25 orderbook. The other segments: Automation (S$175 m), Communication (S$107 m).

Read excerpts of Maybank's report below ....

Excerpts from Maybank KE report
Analyst: Jarick Seet

Large DC orders likely incoming

Maintain BUY; unchanged TP of SGD0.84

We believe that CSE will likely secure large orders towards the end of the year, especially on the data-centre front where they are refocusing their efforts onto, as well as local government contracts.

CSE
Share price: $0.72	Target: $0.84

CSE is also in the midst of qualifying for another 1-2 hyperscaler clients and we expect DC order growth to accelerate.

Management also remains bullish on a stronger 2H25E. Maintain BUY with an unchanged TP of SGD0.84, based on 16x FY25/26E P/E.

Gross and net margins likely to improve

CSE’s gross and net margins for 1H25 both improved to 27.9% and 3.7%, respectively, from 27.6% and 3.5% in 1H24.

Revenue grew 2.8% YoY to SGD440.9m despite the depreciation of USD vs SGD.

Remaining orderbook stands at SGD573.8m as at Jun 2025, which we believe will likely improve once larger orders are secured in 2H25E which will likely lift margins, especially on a net level, with better operating leverage.

Larger data centre order wins to be expected

CSE made a strategic move to reserve capacity and focused on clients in the data centre and utility spaces.

CSE, in Aug 2025, unveiled a SGD59m data centre extension order from its existing US hyperscaler customer.

The first order was SGD20+m 3 years ago and a second was secured in Apr 2024 at SGD49m followed by the third in Aug 2025.

The speed as well as contract sizes have been increasing and we believe this will likely continue.

CSE is also in the midst of qualifying with another 1-2 hyperscaler clients and a win would add significant earnings growth for FY26-28E.

Capacity to triple, which points to more orders

We remain bullish on the outlook for CSE and see potential for a multiyear growth story.

JarickSeet3.18 Jarick Seet, analystManagement will likely expand its capacity in the US more aggressively if larger orders can be secured in 2H25.

Currently, it expects to more than triple its capacity by 2027/28.

Its 50% dividend payout guidance will also provide stability for shareholders along with upside from its positive outlook.