CGS-CIMB has raised its target price for global technology group CSE Global : 544 0% to S$0.45 from S$0.37, but maintains its “hold” call on the stock as current valuations remain “fair”.

The higher target price comes after the research team increased its revenue and core earnings per share (EPS) estimates. It said in a report on Thursday (Jul 20) that it expects faster order book executions from easing supply-chain pressures.

It predicts a core EPS increase of 9 per cent to 21 per cent for FY2023 to FY2025, with an increase in revenue forecasts for the same period by 11 per cent to 13 per cent, supported mainly by the energy and infrastructure segments.

At the new target price, CSE Global trades at 12 times CGS-CIMB’s price-to-earnings estimates for the 2024 calendar year, up from 10.8 times previously. The estimates are based on a historical average from FY2012 to FY2019.

Analysts Kenneth Tan and Lim Siew Khee also forecast a yield of 6.7 per cent for FY2023, which they find attractive.

They believe that Q2 2023 could be an “inflection point” for CSE Global, after seven straight quarters of supply-chain issues. They expect easing global supply-chain pressures will enable the group, helmed by chief executive Lim Boon Kheng, to speed up order book executions, leading to a clearer earnings recovery path.

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The research team expects a core net profit of S$7 million to S$8 million, which is a 54 per cent to 76 per cent increase year on year, for H1 FY2023.

It also forecasts H1 revenue to go up by 25 per cent to 30 per cent on the year, supported by a sizeable infrastructure order book of S$265 million at the end of the first quarter.

CSE Global’s counter was trading unchanged at S$0.435 as at 1.10 pm on Friday.