Analysts raise CSE Global&rsquo s target prices to $1.20 and above after &lsquo game-changing partnership&rsquo with Amazon

Analysts raise CSE Global&rsquo s target prices to $1.20 and above after &lsquo game-changing partnership&rsquo with Amazon

Analysts from Maybank Securities and UOB Kay Hian have raised their target prices on CSE Global after the company announced its &ldquo game-changing partnership&rdquo with Amazon. Maybank has a new target price of $1.20 from 84 cents previously while UOB Kay Hian has a target price of $1.22 from 85 cents before.

CSE Global, on Nov 11, said it was proposing to issue 62.97 million new warrants to Amazon&rsquo s subsidiary. Each warrant represents the right to acquire one share at the exercise price of 76.71 cents. Assuming that the warrants are fully converted, Amazon will hold an 8% stake in the company.

&ldquo This partnership is a major win for CSE, and could boost its data centre-related revenue from around 10% to potentially 30% annually,&rdquo say UOB Kay Hian analysts John Cheong and Heidi Mo in their Nov 12 report.

 

Maybank&rsquo s Jarick Seet believes the move is &ldquo significant&rdquo given that this is the first Singapore-listed company that Amazon has taken a stake in, and validates CSE as one of the US tech company&rsquo s key system integrators for their data centres.

In his Nov 11 report, Seet notes that a US$300 million($390.6 million) per year run-rate from Amazon is significantly higher than its existing US$40 million per year. This refers to the warrants being subject to vesting based on payments of up to US$1.5 billion over five years till Nov 9, 2030.

To Cheong and Mo, the sums are &ldquo significantly higher&rdquo than the year-to-date order win of around US$50 million with Amazon.

While Seet also notes that the US$1.5 billion in potential orders could potentially double CSE Global&rsquo s orderbook from a single client, the analyst expects a gradual ramp-up in capacity. This is likely to start at US$200 million to US$250 million per year and accelerating in 2027 following its expansion phases.

Based on his estimates, CSE Global&rsquo s data centre contribution is projected to increase from 5% in FY2025 to over 30% by FY2027.

Cheong and Mo also believe the company&rsquo s electrification business stands to benefit from the growing data centre demand as the use of artificial intelligence (AI) increases, especially in the US.

&ldquo In August 2025, CSE won a $59 million data centre extension order from its existing US hyperscaler client. In addition, CSE is in the qualification phase with more hyperscaler clients,&rdquo they note.

&ldquo To recap, CSE&rsquo s first data centre order win was only around $20 million in 2023, while the second order was $49 million in 2024, followed by $59 million in 2025. We believe the size of the contract wins will continue to increase due to more adoption of AI,&rdquo they add.

Looking ahead, Seet remains &ldquo bullish&rdquo on CSE&rsquo s outlook and sees potential for a multi-year growth story.

 

&ldquo The company expects to more than triple capacity by 2027/2028, and we believe it will secure another data centre client by 1QFY2026. Its 50% dividend payout guidance will provide shareholder stability alongside upside from the positive outlook,&rdquo he writes.

Seet has also raised his FY2026 and FY2027 patmi estimates by 9.5% and 17.6% to $43 million and $50 million respectively. His new target price is based on a higher FY2026 P/E of 20 times.

Cheong and Mo&rsquo s new target price represents an FY2026 P/E of 21 times as well as +1 standard deviation (s.d.) to mean, up from their previous P/E of 15 times. &ldquo [The higher target price] reflects the higher earnings potential from the new partnership and huge order indications from Amazon.&rdquo

With CSE currently trading at only 15 times its FY2026 P/E, Cheong and Mo believes valuations remain &ldquo undemanding&rdquo given the company&rsquo s exposure to the high-growth data centre space.

They have kept their earnings forecasts for now.

As at 9.37am, shares in CSE Global are trading 9.5 cents higher or 10.8% up at 97.5 cents, or 133.33% up year to date.