• Big news just came out of CSE Global -- Amazon is sending more system integration work to CSE for its massive data centre buildout in the US. Amazon could be placing up to an amazing USD1.5 billion of work with CSE over the next five years. CSE has been servicing Amazon for the last few years with prior contract sizes of US$40m–50m, according to CGS International. • This new deal, which will see Amazon inject up to S$48.3 million cash by exercising warrants issued by CSE, is a game changer for CSE. It validates CSE as a serious player in the US data centre market, the largest by far in the world. • At $1.00, the share price of CSE, in which Temasek Holdings holds the No.1 stake (~23%), has surged 22% since the news came out two days ago. • Three analysts have lifted their target prices substantially to a $1.15-$1.22 range. Read excerpts of Maybank's report below .... |
Excerpts from Maybank KE report
Analyst: Jarick Seet
Riding with Amazon on its data centre expansion
We believe this is significant as CSE is the first-ever SGX company that Amazon took a stake in and validates CSE as one of their key system integrators for their data centres. A USD300m/year run-rate from Amazon is significantly higher than its existing USD40m/year. As a result, we raise our FY26/27E PATMI by 9.5% and 17.6% and raise our TP to SGD1.20 from SGD0.84, based on a higher 20x 26E P/E. Maintain BUY. |
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| Amazon may reach 8% stake in CSE |
Upon full exercise of the warrants, Amazon will own 8% of CSE Global and become a substantial shareholder, with CSE receiving SGD48.3m cash to fund US expansion.
The warrants will be issued on an order-backed basis over 5 years, contingent on up to USD1.5b of orders awarded to CSE.
| Annualized run rate of USD300m/year |
Key types of electrification projects by CSECSE has an orderbook of SGD467.5m and quarterly revenue of SGD257m, up 20.5% YoY from SGD213.9m as of 3Q25.
Dividing the USD1.5b potential order over 5 years translates to approximately SGD391m annually— significantly higher than its current SGD50–60m from Amazon and potentially doubling its orderbook from a single client.
However, we expect a gradual ramp-up in capacity, likely starting at USD200–250m per year and accelerating in 2027 post-expansion phases.
Data centre contribution is projected to rise from 5% in FY25E to over 30% by FY27E.
We remain bullish on the outlook for CSE and see potential for a multi-year growth story. |
→ See Maybank's full report here.
Also, UOB KH's report (target: $1.22) and CGS International (target: $1.15).
→ Read about another data centre play: ISDN: 1H25 Core Profit Jumps 35%, Powering Ahead with Automation and Hydropower
