Company Coverage
CSE Global (CSE SP) 1H26: Earnings Impacted by One-Offs; 2H26 Earnings To Be Stronger
BUY (Maintained)
Current price:
Target price:
Upside:
S$1.24
S$1.79
44.4%
Analyst
Analyst
Highlights
1H26 adjusted net profit fell 12.4% yoy to S$13.9m, making up 34% of our forecast, largely due to one-offs, and remains in line with our expectations.
CSE’s operating momentum remains intact, with revenue up 27% yoy, order intake rising 28% yoy to S$470m, and a robust orderbook of S$620m.
Maintain BUY with an unchanged target price of S$1.79. We expect 2H26 earnings to ramp up as its new facility reaches steady-state.
Analysis
Revenue in line, earnings missed due to one-offs. CSE Global’s (CSE) 1H26 revenue rose 27.4% yoy to S$561.5m, representing 50% of our full year forecast, led by the electrification segment’s US data centre project delivery. Adjusted net profit fell 12.4% yoy to S$13.9m, making up 34% of our full-year forecast. This was due to several factors including a mix shift toward lower-margin data centre projects, S$2.4m startup costs incurred for the new Champion facility, S$6.7m of the electrification segment’s greenfield project overruns and S$5.3m of water/wastewater wind-down costs, impacting gross margins, which compressed 4.1ppt to 23.8% in 1H26. Adjusted EBITDA rose 7% yoy, while adjusted EBITDA margins eased 1.4 ppt to 7.4%.
Momentum in order intake; expects stronger orders in 2H26. 1H26 order intake jumped 28% yoy to S$470m. Momentum was largely driven by electrification demand in the US despite a slowdown in 2Q26 (compared with 1Q26) which was due to a timing difference arising from the replacement of a purchase order, with the new purchase order expected to be received in 3Q26. We expect CSE’s order intake to be stronger in 2H26. Orderbook remains robust at S$620m (+8% yoy), providing a healthy earnings growth outlook.
Highlights
1H26 adjusted net profit fell 12.4% yoy to S$13.9m, making up 34% of our forecast, largely due to one-offs, and remains in line with our expectations.
CSE’s operating momentum remains intact, with revenue up 27% yoy, order intake rising 28% yoy to S$470m, and a robust orderbook of S$620m.
Maintain BUY with an unchanged target price of S$1.79. We expect 2H26 earnings to ramp up as its new facility reaches steady-state.
Analysis
Revenue in line, earnings missed due to one-offs. CSE Global’s (CSE) 1H26 revenue rose 27.4% yoy to S$561.5m, representing 50% of our full year forecast, led by the electrification segment’s US data centre project delivery. Adjusted net profit fell 12.4% yoy to S$13.9m, making up 34% of our full-year forecast. This was due to several factors including a mix shift toward lower-margin data centre projects, S$2.4m startup costs incurred for the new Champion facility, S$6.7m of the electrification segment’s greenfield project overruns and S$5.3m of water/wastewater wind-down costs, impacting gross margins, which compressed 4.1ppt to 23.8% in 1H26. Adjusted EBITDA rose 7% yoy, while adjusted EBITDA margins eased 1.4 ppt to 7.4%.
Momentum in order intake; expects stronger orders in 2H26. 1H26 order intake jumped 28% yoy to S$470m. Momentum was largely driven by electrification demand in the US despite a slowdown in 2Q26 (compared with 1Q26) which was due to a timing difference arising from the replacement of a purchase order, with the new purchase order expected to be received in 3Q26. We expect CSE’s order intake to be stronger in 2H26. Orderbook remains robust at S$620m (+8% yoy), providing a healthy earnings growth outlook.
BUY (Maintained)
Current price:
Target price:
Upside:
S$1.24
S$1.79
44.4%
Analyst
Analyst
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