Brokers' take: DBS keeps 'buy' on CSE Global, sees continued sequential improvement

DBS Group Research is maintaining its "buy" call on CSE Global with a S$0.55 target price after the technology solutions provider's announcement on Wednesday that it had secured S$98.4 million in new orders for the fourth quarter ended December.

This was down from S$230.1 million in new orders secured in the same period a year ago and brings the group's new orders for FY2020 to S$431.5 million, down from S$578.8 million in FY2019.

In a report on Wednesday, DBS said that the latest set of new order intake figures was in line with its forward assumptions for FY2020.

It nonetheless noted a sequential pick-up in new orders within the group's oil and gas (O&G) business segment, which reported a 30.1 per cent quarter-on-quarter growth to S$63 million worth of new order intakes in Q4 from S$48.4 million in the previous quarter.

This reaffirms its belief that the worst is over for CSE Global, said the research house.

Based on CSE Global's latest order book, DBS estimates the group's FY2020 revenue to be S$502.9 million to form 107.5 per cent of its full-year assumptions.

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"With WTI oil prices trending higher to US$61/bbl from its stabilisation at US$40/bbl in H2 2020, we are expecting continued sequential improvement ahead," said DBS.

The group will be releasing its FY2020 results on Feb 23.

Shares of CSE Global closed at S$0.485 on Thursday, down 3 per cent.