CSE GLOBAL LTD

CSE GLOBAL LTD | BUY

OCT 8 CLOSE: S$0.475

TARGET PRICE: S$0.57

KGI Securities, Oct 8

We re-initiate with a "buy"; our fair value of $0.57 is based on a blended 12.5 times FY2019 forecasted price/earnings ratio and 2.1 times 2019 forecasted price/book ratio.

CSE's valuation is currently attractive on undemanding earnings multiple of 15/12/10 times 2018/19/20 forecasted core earnings per share (EPS).

Positive company outlook on 22-26 per cent EPS growth in next three years from better industry prospects and from synergies with its new major shareholder.

We expect downside risks to be mitigated by its above-industry 5.8 per cent dividend yield.

We also visited CSE's Australia operations and eight other Singapore Exchange and Australian Securities Exchange listed companies.

All the companies we met cited recovering demand on stronger tendering activities across all sectors. CSE is well-placed to capitalise on opportunities as improving industry trends lend support to growth prospects.

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