Maybank expects large DC orders coming in for CSE Global, maintains &lsquo buy&rsquo call and TP of 84 cents

Jarrick Seet of Maybank Securities has maintained his bullish view on CSE Global, predicting that the company 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.

According to Seet in his Oct 17 note, he understands that the company is also in the midst of qualifying for another 1 - 2 hyperscaler clients and he expects CSE Global&rsquo s data centre order book growth to accelerate.

Seet, who has kept his &ldquo buy&rdquo call and 84 cents target price, predicts that a win on these hyperscaler clients would help add to significant earnings growth for FY2026 to FY2028.

 

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Previously, CSE Global made a strategic move to reserve capacity and to focus on clients in the data centre and utility spaces. In Aug 2025, the company unveiled a $59 million data centre extension order from its existing US hyperscaler customer.

He expects CSE Global&rsquo s gross and net margins to improve once the larger orders are secured in 2HFY2025. With better operating leverage, the company is set to enjoy better margins too.

In the most recent 1HFY2025, CSE Global&rsquo s gross and net margins both improved to 27.9% and 3.7%, respectively, from 27.6% and 3.5% in 1HFY2024. Revenue grew 2.8% y-o-y to $440.9 million despite the depreciation of USD vs SGD.

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The analyst predicts that CSE Global&rsquo s management will likely expand its capacity in the US more aggressively if the large orders are secured. Currently, it expects to more than triple its capacity by FY2027 and FY2028.

 

&ldquo We remain bullish on CSE Global&rsquo s outlook and see potential for a multi-year growth story,&rdquo says Seet.

On top of earnings growth, Seet also highlights that CSE Global&rsquo s 50% dividend payout guidance will provide stability for shareholders along with upside from its positive outlook.

CSE Global shares traded at 72 cents as at 2.50 pm, up 9.02% for the day and up nearly 73% year to date.

Teo Zheng LongTue, Oct 21, 2025  &bull   03:07 PM GMT+08  &bull     &bull   2  min read

1. 
   
   Surge in Data-Center Projects
   • 
     
     CSE Global&rsquo s inspection, calibration and commissioning teams are in high demand for new hyperscale and AI-optimized facilities.
   • 
     
     Expanded project pipelines provide strong revenue visibility&mdash large multi-million-dollar contracts and deep backlogs that support 2025&ndash 26 growth targets.
2. 
   
   Higher Recurring Calibration Revenues
   • 
     
     As data-centers install more precision power and cooling equipment, mandatory calibration and preventive maintenance cycles increase.
   • 
     
     This boosts recurring service revenues, which carry higher margins and stable cash flows compared with one-off testing jobs.
3. 
   
   Premium Pricing for Specialized Expertise
   • 
     
     The technical complexity of AI-hardware environments (high-density racks, custom HVAC, UPS &ldquo fast-transfer&rdquo tests) allows CSE to command premium rates versus commodity calibration.
   • 
     
     Early entrants with proven track records&mdash like CSE&mdash can negotiate price escalators for rapid-turn &ldquo first-of-type&rdquo facilities.
4. 
   
   Geographic Expansion into New Markets
   • 
     
     AI demand is strongest in North America, Europe and Southeast Asia&mdash regions where CSE has been scaling operations.
   • 
     
     Setting up local labs and accreditation in emerging AI hubs (e.g., Malaysia, Vietnam) drives incremental revenue with lower entry costs.
5. 
   
   Cross-Selling of Digital and Remote Monitoring Solutions
   • 
     
     CSE&rsquo s recent investment in condition-monitoring platforms and digital inspection tools aligns with &ldquo Industry 4.0&rdquo trends in AI facilities.
   • 
     
     Clients increasingly adopt remote diagnostics, data analytics and AI-assisted predictive maintenance&mdash areas where CSE can bundle high-value software-as-a-service with traditional fieldwork.
6. 
   
   Strengthened Client Relationships and Long-Term Contracts
   • 
     
     Major cloud-service and chip-fabrication customers lock in multi-year service agreements to ensure uptime, giving CSE multi-year revenue visibility.
   • 
     
     These strategic alliances often include revenue-share or incentive structures tied to availability metrics, aligning CSE&rsquo s growth directly with clients&rsquo operational success.
7. 
   
   Robust Cash Flow and Balance-Sheet Flexibility
   • 
     
     Strong front-loaded billings for site-acceptance testing fuel cash generation, enabling CSE to reinvest in lab expansion, training and technology.
   • 
     
     Healthy liquidity positions the company to make accretive bolt-on acquisitions of niche calibration labs or inspection specialists.