CSE share price in double trouble!

Lifetime Membership The last time that I covered CSE Global, a homegrown enterprise listed in SGX since 1999, was in 2016, which was a long time ago. The reason for writing this article was because I am looking to invest in a sustainable specializing in the manufacturing of energy distribution system and electric vehicle (EV) charging system. And CSE Global seems to be an interesting play in this arena.

Bizarrely, CSE share price was trading at around $0.40 back in 2016. Fast forward 9 years later, the counter remained at similar level. Of course, a number of things had happened since 2016, including the oil and gas slump followed by the pandemic. These events combined to change the destiny of CSE Global as it pivots in new growth sector – Electrification. So let’s assess CSE share price outlook given its exciting new journey.

CSE Global is a systems integrator providing electrification, communications, and automation solutions across various industries globally. The Group has three core business segments – Electrification, Communications and Automation. The company used to be the electronics arm of Singapore Technologies (ST) but after a successful management buy-out in 1997, the company was listed in the Singapore Exchange in 1999. Following a string of acquisitions made over the last two decades, CSE has evolved into a technology giant with 58 offices and close to 2000 employees across the globe.

Like AEM Holdings, Temasek Holdings took up a significant stake (25.03%) in CSE Global in 2020 to become its largest stakeholder. As in the case of AEM, Temasek has a director seat in CSE Global through Derek Lau, so Temasek is not considered a sleeping partner of CSE. However, unlike AEM, CSE share price did not really taken off even with the strategic investment from Temasek Holdings. What could be the reason for the lackluster performance of CSE share price and what could have attracted Temasek to invest in CSE in 2020 and the long-term impact to CSE share price?

Similar to AEM, CSE Global has strong engineering capabilities as it possesses a number of patented and unpatented technologies of tracking system, lock device and water treatment system. The carrying value of the intellectual property rights amounted to $390,000 as at 31 December 2023 and have amortization period of 16 years. Additionally, CSE Global has a sizeable customer base comprising large government organisations and renowned brands across the Energy, Infrastructure, and Mining & Minerals sectors. These customer relationships have a net carrying value of $12.5 million.

Temasek must have saw the long-term potential of CSE share price and should have played a pivotal role in CSE’s pivot in the green energy sector. The problem for CSE share price is that most investors still view it as an oil and gas counter even though nearly 50% of its revenue now comes from the Electrification segment (as at Q3FY2024). This is because CSE Global traditionally derived the bulk of its revenue from the oil and gas industry. Most investors also don’t really understand what does the “Electrification” business segment of CSE entails.

In this article, I will share my insights on the outlook for CSE share price in 2025 and what could be the foreseeable risks that could derail the growth of the company.Note that this is an opinion article and not meant to be a financial advice. Please do your due diligence or engage financial advisors before investing in the stock market. Furthermore, I am not vested in CSE Global share currently. Whether CSE share price will surge or collapse has no impact on me. Thus, this article is not meant to induce readers to make any form of investment decisions.

CSE share price faces trouble in 2025

There is no doubt that the Electrification business segment is bringing in the big bucks for CSE Global. For perspective, order intake jumped 42% year-on-year to $561 million in FY2023. This growth momentum is expected to carry forward to FY2024 as the Group clinched a number of new contracts. However, dark clouds threaten to knock the wind off CSE share price as [This is a premium article. The rest of the content is blocked and can be accessible by SG Wealth Builder Members only. To read the full content, please sign up as member.]

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