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Broker's take: RHB initiates coverage on CSE Global with 'buy'

RHB Research has initiated a "buy" call on CSE Global - a seller of safety shutdown systems to oil-and-gas customers - seeing it as an attractive dividend player and a beneficiary of higher oil prices. 

"We believe elevated oil prices will encourage more system integration activities in the oil-and-gas space," said the brokerage in a report on Thursday. It said this situation makes CSE an excellent proxy as more than 65 per cent of the firm's revenue is derived from the sector.

CSE's dividend yield is expected at 5.8 per cent, RHB said.

RHB set set a target price for CSE Global at S$0.59, which represents an upside of nearly 30 per cent to current trading prices. The stock is trading at about 12.7 times that of its fiscal 2019 price-to-earnings ratio, representing a 22 per cent discount to the industry, said RHB.

Shares of CSE Global were trading at S$0.455, down two cents or 4.21 per cent, as at 10.06 am.

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