• Two Singapore listcos are riding on industry upcycles and busily growing their orderbooks significantly -- Sanli Environmental and CSE Global. • Sanli, which is established in water management with the Public Utilities Board as its key client, is racking up a record orderbook for its core EPC (engineering, procurement & construction) and O&M (operations & maintenance) work for government projects. • As for CSE Global, its order book is poised to expand with jobs providing electrification systems to data centres in the US, by far the world's largest market with reportedly 5,500 data centres or 10X more than the closest peer. Year-to-date, Sanli and CSE stocks have surged 226% and 81%, respectively. • Read more about them in excerpts of two analyst reports .... |
Excerpts from Maybank Kim Eng report
Analyst: Jarick Seet
| Diversifying to LTA based on M&E expertise Sanli’s new SGD281m LTA contract for the supply and installation of electrical services for Singapore’s Cross Island Line Phase 1 and Cross Island Line – Punggol Extension is its maiden contract with LTA.
We believe this diversification opens up a new revenue source for the company and is a testament to its M&E capabilities for large-scale projects. This will be a joint venture with China Railway with a contract duration of 5 years. This will roughly add SGD56m of revenue per year from 2H26E onwards. |
||||
Sanli CEO Sim Hock HengRaise TP to SGD0.50 from SGD0.38
Sanli said its joint venture (JV) with China Railway secured a maiden project with Singapore’s Land Transport Authority (LTA) valued at SGD281m.
This is the largest contract secured to date and will significantly boost its orderbook to SGD614.9m, a record high.
We view this as public sector validation of its capabilities and track record in the maintenance and equipment (M&E) space for large-scale projects.
We also believe that Sanli has a good opportunity to add SGD205m to its orderbook by end-2025 through the Public Utilities Board (PUB) tender it participated in July, which could boost its orderbook to SGD800m.
We lift our FY26/27E PATMI estimates by 11% and 14.8%, respectively, resulting in a new TP of SGD0.50 based on 16x FY27E P/E.
Maintain BUY.
| Expect record revenues and earnings |
We think Sanli is well-positioned for sustained growth from FY26 to FY36, driven by PUB water-related projects and anticipated Long Island tenders as part of Singapore’s climate change mitigation efforts.
Successfully securing a portion of these projects could establish a multi-year growth trajectory for Sanli.
We believe securing these orders would elevate Sanli’s orderbook to fresh highs. This may eventually generate record revenues and profitability, barring any hiccups to execution.
• Electrification business stands to benefit from burgeoning data centre demand. CSE’s electrification segment stands to benefit from growing data centre (DC) demand as AI adoption increases, especially in the US. |
|||||
