CSE Global’s share slide over boardroom clash overblown: analysts

[SINGAPORE] Analysts expect the recent volatility in CSE Global’s share price to stabilise, now that the company has given detailed disclosures on the rift between its chairman Eugene Lai and former lead independent director Tan Chian Khong.

The dispute, which triggered a sharp drop in the technology systems integrator’s share price earlier this month, was characterised by brokerages as a governance-led transition rather than a sign of operational distress.

A clash between Lai and Tan over corporate governance, board renewal and management oversight had led to Tan’s resignation on Jun 2.

Shares of CSE Global had been on a tear before then, hitting hit an all-time high of S$1.78 at the end of May. They then fell 20.6 per cent from their Jun 2 closing price of S$1.65 to a two-month low of S$1.31 just one week after Tan resigned.

The friction arose from a May 19 discussion where Lai, seeking a board refresh with stronger mergers and acquisitions expertise, suggested that Tan step down.

Asserting his duty to ordinary shareholders, Tan initially refused but subsequently resigned, citing a breakdown in trust.

Despite the public airing of corporate grievances, analysts have urged investors to capitalise on CSE Global’s recent share price weakness. The market seems to have reacted accordingly, with shares of CSE Global rising 4.4 per cent or S$0.60 to close at S$1.43 on Thursday (Jun 18).

Brokerages maintain “buy” calls

In a Thursday note, RHB maintained its “buy” call and target price of S$1.94 for CSE Global.

Analyst Alfie Yeo said the clarifications submitted in response to queries from the Singapore Exchange on Tuesday should "stabilise CSE’s trading volatility”.

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He added that the core growth narrative remains firmly intact, powered by an anticipated US$1.5 billion worth of data centre electrification orders from Amazon over the next five years.

RHB still views the stock a compelling value, trading at a forward price-to-earnings multiple of roughly 20 times against a projected 27 per cent earnings compound annual growth rate from until 2028.

Echoing this sentiment, UOB Kay Hian (UOBKH) on Thursday separately kept a “buy” call and S$1.79 target price.

Analysts John Cheong and Tang Kai Jie said that the sell-down has overshot the company’s fundamentals, pointing out that first-quarter revenue for 2026 jumped 29 per cent year on year to S$265 million.

They also noted that CSE Global’s order intake for the quarter surged 75 per cent to S$271 million, leaving the company with a “robust” S$716 million order book.

While a “softer” first half of 2026 is likely due to startup costs for a new 241,000 square foot electrification facility and rising material costs, UOBKH expects a solid operational recovery by the second half of the year as these capacity expansions reach a steady state.

On the corporate governance front, both brokerages pointed out that independent oversight remains intact, as four independent directors continue to serve on the seven-member board, satisfying listing requirements.

Cheong and Tang added that the “swift, high-calibre” replacements of the lead independent director and the audit and risk committee chairman positions will “restore independent oversight”.