• Maybank analyst Jarick Seet has made at least two visits to CSE Global’s electrification operations in Houston: one in Sept 2024 and another in July 2026. • That matters. Factory visits allow an analyst to see whether expansion plans are real, speak directly with management and spot operational constraints. • This probably gives Jarick an edge when assessing CSE’s execution and explaining its investment story. • In his operationally informative but not an earnings-upgrade report, he visited CSE's 241,000 sq ft facility mainly serving a key data-centre customer (Amazon). • CSE stock traded at S$0.47 when Jarick published his Sept 2024 report. Recently, it was around S$1.21—approximately 157% higher, excluding dividends—although it had retreated from a 52-week high of S$1.78. • Read excerpts of Maybank's report below ..... |
Excerpts from Maybank report
Analyst: Jarick Seet
We visited CSE facilities in Houston, US, especially its newly leased 241,000 sqft facility for its key data centre client, and were impressed with its positive outlook.
We expect short-term headwinds from higher upfront costs, which will likely impact 1H26E earnings. Ramp-up in production is also restricted by copper rod supply bottlenecks, which management expects to resolve by 4Q26. However, we expect 2H26 earnings to make up for any shortfall. CSE also acquired SEI Wireless Solutions for USD8m and will add about USD1-1.5m to its PATMI. Retain BUY and TP of SGD2.25. |
|||||
| Short-term headwinds: earnings + copper bottleneck |
We believe its upcoming 1H26E earnings will be weaker due to upfront costs incurred before production fully ramps up at its new 241,000 sqft facility in the US. 
Upfront costs include rental and higher labour costs, as it needs to hire and train about 200 to 300 contractors months in advance, with hourly rates of around USD23-24.
In addition, there is currently a shortage of copper rods, which has limited production at the new facility.
It is currently running at a monthly run rate of USD20-23m for its key data centre client, but could ramp to potentially double or more once the copper rod supply bottleneck is resolved.
We expect this issue to potentially resolve by the end of 4Q26.
| Plenty of new opportunities |
TCSE is engaging new clients on the data centre front and within its supply chain to find new opportunities.
Examples include potential new data centre clients for its power solutions, as well as existing parts in electrical equipment centres that are currently supplied by other vendors.
Other vendors could also become potential customers of CSE Global.
Lim Boon Kheng, MD of CSE Global
Its key data centre client has four key suppliers, of which CSE is the third largest with about 15-18% market share.
It is also trying to gain more share for new programmes in 2027 and 2028.
We remain bullish on CSE’s outlook and see potential for a multi-year growth story.  Jarick Seet, analystThe company expects to more than triple capacity by 2027/28, and we expect it will secure another data-centre client by 1Q27. We see CSE as a proxy for the AI data centre boom in the US. |
→ See also: CGS International's report on its US visit to CSE Global, here.
→ CSE GLOBAL: Look beyond boardroom drama, 1H margin squeeze
