CSE Global: Powering the AI infrastructure build-out

Initiation Coverage

CSE Global (SGX: 544)

BUY: SGD 1.56

The rapid adoption of artificial intelligence is reshaping far more than the technology sector. While investors have focused largely on hyperscalers and chipmakers, another critical bottleneck in the AI value chain is becoming increasingly apparent: the electrical infrastructure required to power the world's expanding network of hyperscale data centres. As AI workloads become increasingly power-intensive, demand is shifting beyond computing hardware towards the electrical systems that enable these facilities to operate reliably at scale.

From engineering contractor to critical infrastructure systems integrator

CSE Global Limited (SGX: 544) is a Singapore-listed specialist systems integrator providing electrification, communications and automation solutions for critical infrastructure across 14 countries through a network of 61 offices worldwide. Established in 1985 as the engineering projects division of Chartered Electronics Industries Pte Ltd, the business was spun off as CEI Systems & Engineering Pte Ltd in 1991, underwent a management buyout in 1996, and was subsequently listed on the Singapore Exchange in December 1998.

Today, with approximately 2,000 employees and a market capitalisation exceeding SGD 900 million, CSE has evolved well beyond its origins as an engineering contractor into a leading provider of mission-critical infrastructure solutions. Rather than manufacturing equipment, the group designs, integrates and maintains highly customised electrical, communications and automation systems that enable customers to operate complex infrastructure reliably and efficiently. This solutions-based business model has allowed CSE to establish long-term customer relationships while benefiting from the structural growth in electrification, digital infrastructure and industrial automation.

Business segments and operational structure

CSE operates through three complementary business segments: Electrification, Communications and Automation, each serving different stages of critical infrastructure development while providing diversified earnings streams.

The Electrification segment designs, procures, assembles and commissions complete electrical distribution and power systems for data centres, industrial facilities and liquefied natural gas (LNG) projects. CSE Global has the capability to manufacture prefabricated electrical rooms—commonly known as e-houses or power skids—which are fully integrated electrical infrastructure modules assembled, wired and tested at CSE's manufacturing facility before being delivered to customer sites. Reflecting robust demand from AI-driven data centre construction and LNG developments, Electrification has become the group's primary growth engine, contributing 52% of FY2025 revenue and increasing to 55% in 1Q2026. This marks a significant transformation in CSE's business mix, with Electrification overtaking its legacy Automation business as the group's largest revenue contributor.

The Communications segment operates under the CSE Crosscom brand and provides integrated mission-critical communications, safety and security solutions for public safety agencies and critical infrastructure operators. Following the acquisition of SEI Wireless Solutions in July 2026, the business expanded its presence across five US states. Importantly, the segment generates a high proportion of recurring revenue through maintenance, servicing and time-and-material contracts, providing greater earnings stability than the more project-based Electrification business.

The Automation segment provides process automation and control solutions, including Supervisory Control and Data Acquisition (SCADA) systems, distributed control systems, safety shutdown systems and plant information management platforms for customers across the oil and gas, water treatment and industrial sectors. This represents CSE's original core business, built over several decades through long-standing relationships with petrochemical producers and industrial operators across the Americas, Asia Pacific and the United Kingdom. While Automation revenue increased a modest 3.0% in 2025, management is progressively shifting the segment away from large greenfield water and wastewater projects—which have historically experienced margin volatility—and towards higher-value opportunities such as industrial cybersecurity and artificial intelligence-enabled automation solutions.

Table 1: Electrification has become CSE Global's largest business segment by revenue

Segment	2025 Revenue (SGD m)	% of Total Revenue	Key End Markets
Electrification	507.0	52%	Data centres, LNG, Industrials
Communications	261.7	27%	Public safety, Data centres, Industrial
Automation	200.2	21%	Oil & gas, Water, Infrastructure
Group Total	968.9	100%
Source: CSE Global Annual Report 2025 Data as of 31 Dec 2025

Geographic footprint and revenue mix

CSE's operations are geographically diversified, although the Americas have become the group's dominant earnings contributor following the rapid expansion of its Electrification business. In 2025, the Americas accounted for 68.9% of group revenue, followed by Asia Pacific at 28.9%, while Europe and the Middle East contributed the remaining 2.2%.

Figure 1: The Americas accounted for nearly 70% of 2025 revenue

Beyond geographic diversification, CSE also benefits from a resilient revenue mix through its Flow Business, comprising brownfield upgrades, maintenance work and smaller repeat projects that generate recurring customer demand. Flow Business accounted for 71% of 2025 revenue, up from 69% in 2024, providing a stable earnings base against which larger greenfield project awards offer additional upside.

Ownership structure and management team

CSE's shareholder base is anchored by long-term institutional investors. Heliconia Capital Management, a wholly owned subsidiary of Temasek Holdings, became a substantial shareholder in July 2020 and remains the group's largest institutional investor with a 11.94% stake as of 31 December 2025.

The group is led by Mr. Lim Boon Kheng, Group Managing Director and Chief Executive Officer, who has overseen CSE's transformation from a predominantly oil and gas automation business into a diversified critical infrastructure solutions provider with growing exposure to electrification, communications and digital infrastructure.

Table 2: CSE Global's 10 largest shareholders

	Shareholder	No. of Shares ('000)	% Held
1	Heliconia Capital Management Pte Ltd (Temasek)	86,440	11.94%
2	DBS Nominees (Private) Limited	74,120	10.24%
3	Citibank Nominees Singapore Pte Ltd	52,310	7.22%
4	UOB Kay Hian Private Limited	31,850	4.40%
5	HSBC (Singapore) Nominees Pte Ltd	28,670	3.96%
6	BNP Paribas Nominees Singapore Pte Ltd	22,130	3.06%
7	OCBC Securities Private Limited	17,290	2.39%
8	Raffles Nominees (Pte) Limited	14,820	2.05%
9	United Overseas Bank Nominees (Private) Limited	12,460	1.72%
10	Phillip Securities Pte Ltd	9,740	1.34%
Source: CSE Global Annual Report 2025 Data as of 31 Dec 2025

Recent financial performance

CSE Global began 2026 on a strong footing, with 1Q2026 revenue increasing 29.1% year-on-year to SGD 265.2 million.

Electrification revenue surged 50.1% as major hyperscale data centre projects in the Americas progressed, while Communications delivered steady growth of 18.5%, supported by recent acquisitions and continued demand across Asia Pacific. Automation revenue remained broadly stable at SGD 50.3 million, consistent with management's strategy of prioritising higher-quality projects over volume growth.

More importantly, new order momentum accelerated significantly during the quarter. Order intake increased 74.6% year-on-year, led by Electrification orders, which surged 393.0% and accounted for nearly two-thirds of total group order intake. As a result, CSE's order book reached SGD 716.0 million as of 31 March 2026, representing a 16.2% increase from a year earlier and providing strong revenue visibility for the remainder of 2026.

Management maintained a disciplined outlook, reiterating its focus on selective tendering and execution quality over pursuing volume growth.

Table 3: Summary of 1Q2026 operating performance

The AI supercycle has made electrical infrastructure one of the world's most valuable assets

The global data centre industry is undergoing its most significant transformation since the commercialisation of the internet, driven by the rapid deployment of large language models (LLMs) and AI computing infrastructure. Unlike traditional cloud workloads, AI data centres require substantially higher power densities, placing unprecedented demands on electrical infrastructure. As a result, electrical systems have evolved from a supporting function into one of the most critical enablers of AI deployment.

Reflecting this structural shift, the world's 14 largest publicly listed data centre operators are expected to invest nearly USD 750 billion in capital expenditure in 2026, up from approximately USD 450 billion in 2025, representing a 67% year-on-year increase and the largest single-year expansion in industry history.

This investment wave is translating directly into soaring electricity demand. Goldman Sachs Research estimates that US data centre power demand will increase by approximately 50% to 92GW by 2027, while global data centre electricity consumption is projected to almost double from 485TWh in 2025 to around 950TWh by 2030.

Power infrastructure has become one of the bottlenecks to AI deployment

While hyperscalers continue to commit record levels of capital to AI infrastructure, the pace of new data centre construction is increasingly constrained by the availability of electrical infrastructure rather than financing. According to McKinsey & Company's report, shortages of transformers, medium-voltage switchgear, power distribution equipment and specialised engineering resources are becoming key constraints on AI data centre deployment.

These bottlenecks extend well beyond equipment manufacturing. Modern AI data centres require increasingly complex substations, electrical distribution networks and backup power systems, while compressed construction schedules have accelerated demand for prefabricated, factory-tested electrical infrastructure that can be rapidly deployed on site. Rather than sourcing individual electrical components, hyperscale operators are increasingly procuring integrated electrical solutions that combine engineering, manufacturing, testing and commissioning into a single delivery model.

At the same time, shortages of experienced electrical engineers, commissioning specialists and field technicians have emerged as another critical industry constraint. Consequently, competitive advantage is increasingly shifting towards systems integrators with proven engineering capabilities and execution capacity, rather than equipment suppliers alone.

The US LNG export expansion provides a second independent electrical infrastructure growth cycle

While AI infrastructure is the primary driver of electrical infrastructure investment today, the US is simultaneously undergoing another large-scale industrial expansion that draws upon many of the same engineering capabilities—the continued build-out of LNG export facilities.

Following the disruption to global energy markets in 2022, Europe has significantly increased its reliance on US LNG exports as part of its long-term energy security strategy. As a result, demand for US LNG export capacity is increasingly underpinned by structural energy security considerations.

The investment pipeline remains substantial. The US LNG infrastructure market is forecast to grow from USD 49.2 billion in 2026 to USD 77.9 billion by 2033 (6.8% CAGR). Meanwhile, North American LNG export capacity is expected to more than double by 2029, driven by major Gulf Coast liquefaction projects, including Plaquemines LNG, Corpus Christi Stage 3 and Golden Pass LNG, as well as expansions at existing terminals.

Importantly, LNG export terminals require a wide range of mission-critical electrical infrastructure, including high-voltage power distribution systems, protection equipment, automation platforms and prefabricated electrical buildings. This creates a sizeable demand opportunity for specialist electrical systems integrators such as CSE Global.

Public safety communications and industrial automation markets continue to provide resilient demand

Beyond data centre electrification and LNG infrastructure, the public safety communications and industrial automation markets continue to provide resilient demand, supported by ongoing government and industrial investment.

The North American public safety wireless communications market is projected to grow from USD 19.6 billion in 2026 to USD 32.6 billion by 2033, representing a 7.6% CAGR, driven by continued investment in emergency communications infrastructure, technology upgrades and the replacement of ageing radio networks.

Meanwhile, the global oil and gas automation market is forecast to expand from USD 46.2 billion in 2026 to USD 63.2 billion by 2031, representing a 6.5% CAGR, as energy operators continue to invest in automation, digitalisation and operational efficiency. In addition, the growing adoption of operational technology (OT) cybersecurity is creating new demand for securing industrial control systems and other critical infrastructure against evolving cyber threats.

OEM-agnostic systems integration differentiates CSE in hyperscale data centres

Unlike traditional electrical equipment manufacturers, CSE Global does not manufacture proprietary electrical products. Instead, it operates as an OEM-agnostic systems integrator, designing and delivering complete electrical infrastructure solutions using equipment sourced from leading global manufacturers such as ABB, Schneider Electric, Siemens and Eaton according to customers' technical specifications and project requirements.

This neutrality represents an important competitive advantage in the hyperscale data centre market. One of CSE's closest competitors, Fibrebond, was acquired by Eaton in 2024, creating an integrated business that both manufactures electrical equipment and supplies prefabricated electrical enclosures. While this allows Eaton to offer a vertically integrated solution, it also creates an inherent conflict of interest, as the company has a commercial incentive to specify its own products wherever possible.

By contrast, CSE acts as an independent engineering partner whose role is to optimise the customer's overall electrical system rather than maximise equipment sales. For hyperscale operators, whose procurement strategies prioritise technical performance, supply chain diversification and competitive pricing, an OEM-neutral systems integrator provides greater flexibility in equipment selection while reducing reliance on any single manufacturer.

Deep engineering expertise provides a competitive advantage across multiple infrastructure end markets

CSE's engineering expertise was established well before the current AI investment cycle. For more than three decades, the group has built deep capabilities in designing and integrating electrical, automation and control systems for offshore platforms, petrochemical complexes and LNG facilities—some of the world's most technically demanding industrial environments.

These projects require specialised expertise in high-voltage power distribution, multi-vendor systems integration, factory testing and commissioning, as well as the delivery of mission-critical electrical systems that must operate safely and reliably under demanding conditions. Importantly, these capabilities are highly transferable across infrastructure end markets. Although hyperscale data centres and LNG export terminals serve different industries, both require complex electrical systems capable of supporting high power loads, continuous operation and near-zero downtime. This enables CSE to compete across multiple critical infrastructure sectors using the same core engineering capabilities, giving the group a differentiated position relative to contractors with expertise concentrated in a single end market.

High customer switching costs reinforce CSE's competitive position in public safety communications

Unlike the Electrification business, where competitive advantage is underpinned by engineering expertise, CSE's Communications segment derives its competitive positioning from the high switching costs inherent in mission-critical public safety communications networks.

CSE designs, deploys and maintains integrated communications networks for public safety agencies. Each network is highly customised to a customer's operational requirements, incorporating unique channel configurations, encryption protocols, interoperability standards and software architectures that are developed and refined over years of collaboration. Once deployed, these networks are typically maintained by the same systems integrator throughout their operational life—often spanning 10 to 15 years—covering maintenance, software upgrades, equipment replacement and network expansion. As a result, much of the operational knowledge resides with the incumbent provider through accumulated engineering expertise and operational experience, rather than being fully documented or easily transferred.

This creates a durable competitive advantage for established incumbents. Any competing contractor seeking to replace the existing provider must first understand the existing network architecture, validate system performance and ensure seamless integration with emergency response operations before undertaking upgrades or expansion. Given the mission-critical nature of these networks, customers typically prioritise execution certainty, system reliability and operational continuity over marginal cost savings, resulting in high customer retention and an expanding installed base that further strengthens CSE's competitive position over time.

The Amazon strategic partnership secures CSE's position in the AI-driven data centre electrification cycle

The rapid expansion of AI infrastructure is driving an unprecedented wave of investment in data centre electrical infrastructure, creating a multi-year growth opportunity for specialist systems integrators. As discussed in the previous section, power availability and electrical infrastructure have become the primary bottlenecks to hyperscale data centre deployment, increasing demand for experienced engineering partners capable of delivering integrated, mission-critical electrical systems. Through its Electrification business, CSE is well positioned to benefit from this structural investment cycle, supported by its established track record in designing and manufacturing prefabricated power distribution centres and integrated electrical solutions.

This positioning was significantly strengthened in November 2025 when CSE entered into a strategic framework agreement with Amazon, under which the technology giant intends to award up to USD 1.5 billion of electrification contracts over five years. More importantly, the partnership goes beyond a conventional supplier arrangement. Amazon received performance-linked warrants to acquire up to 62.97 million new CSE shares at SGD 0.767 per share, with vesting tied directly to qualifying payments under the programme. This creates a unique alignment of interests, whereby Amazon benefits not only from expanding its AI infrastructure, but also from CSE's long-term commercial success.

The partnership has already moved beyond the planning stage. Following the initial USD 143.5 million contract awarded in December 2025, production continues to ramp up at CSE's Champion facility in Texas. At the same time, management is working to secure additional AWS programmes while expanding its customer base to include a second hyperscale operator, providing further upside beyond the existing framework.

In our view, the significance of the Amazon partnership extends beyond its headline contract value. It provides CSE with substantially greater earnings visibility by shifting a larger proportion of Electrification revenue from conventional project-based work to a long-term programme supported by one of the world's largest AI infrastructure investors. Successful execution under the Amazon programme also serves as a strong reference case, validating CSE's engineering capabilities and enhancing its credibility when competing for future contracts with other hyperscale data centre operators. Combined with the structural growth in global data centre electrification, this positions CSE to capture a broader pipeline of opportunities while delivering sustained earnings growth over the coming years.

Communications acquisitions are systematically expanding CSE's recurring earnings base

While the Electrification segment is expected to remain CSE's primary growth engine, management is simultaneously executing a disciplined acquisition strategy to build the Communications business into a larger contributor of recurring earnings.

Rather than pursuing large transformational deals, the group has consistently acquired established Motorola Solutions channel partners with long-standing customer relationships in underpenetrated markets across the US. The strategy follows a repeatable and scalable playbook. Each acquisition expands CSE's installed base of public safety and critical infrastructure customers, broadens its geographic footprint, and immediately adds recurring maintenance and service revenue.

Execution has already produced tangible results. Recent acquisitions, including Chicago Communications and SEI Wireless Solutions, have expanded CSE's Communications footprint across the US Midwest through northern Illinois and northwest Indiana, while strengthening its statewide presence in Florida. Management has guided that it intends to complete two Communications acquisitions by end-2026, with SEI representing the first. We view this acquisition strategy positively, as the fragmented US market continues to offer opportunities to acquire established Motorola Solutions channel partners with loyal customer bases. Over time, each acquisition enlarges CSE's installed base, increases recurring maintenance income and broadens its geographic reach, supporting a larger and higher-quality recurring earnings platform.

Strategic review could unlock shareholder value

CSE Global's ongoing strategic review remains an important near-term catalyst. Initiated following a non-binding expression of interest received by Heliconia Capital Management, the review has the potential to unlock shareholder value through a range of strategic outcomes, including a potential corporate transaction or the introduction of a strategic investor. While there is no certainty that a transaction will materialise, the conclusion of the review is likely to provide greater clarity on the company's strategic direction and valuation, reducing an overhang that has persisted since the review was announced.

Beneficiary of Singapore's capital market revitalisation

CSE Global is well positioned to benefit from Singapore's ongoing capital market revitalisation initiatives, which aim to improve liquidity, strengthen research coverage and attract greater institutional participation in the domestic equity market. As a research beneficiary under the enhanced Grant for Equity Market Singapore (GEMS) scheme, the company enjoys broader independent research coverage, helping to increase investor awareness and narrow the valuation discount often associated with small and mid-cap Singapore-listed companies.

In addition, CSE Global is a constituent of the iEdge Singapore Next 50 Index, positioning it to benefit from future passive investment flows as Singapore's index ecosystem continues to develop. The launch of dedicated investment products, such as ETFs or index-tracking funds benchmarked to the Next 50 Index, could generate incremental passive demand for constituent stocks, improving CSE's market visibility, trading liquidity and institutional ownership over time.

We adopt the forward price-to-earnings (P/E) valuation methodology, as it best reflects CSE Global's improving earnings quality and long-term growth outlook. According to management, the Electrification business only began making a meaningful contribution to group revenue from 2021 onwards. As such, we adopt CSE's average forward P/E since 2021 as our valuation reference, as it better captures the group's current business mix following its strategic transformation towards Electrification and Communications.

Figure 2: CSE Global's fair P/E multiple of 16.0x is one standard deviation above its historical average since 2021

We assign a fair P/E multiple of 16x, representing one standard deviation above its historical average since 2021. This premium reflects CSE's enhanced earnings visibility following its strategic partnership with Amazon, underpinned by a long-term framework agreement of up to USD 1.5 billion in electrification projects. Together with the structural growth in AI-driven data centre electrification and an expanding base of recurring Communications earnings, these factors support a valuation premium to CSE's historical average.

Applying our target P/E multiple to our forecasted 2028 EPS results in a target price of SGD 1.56, representing 22.2% upside from the closing price on 4 Aug 2026. We initiate coverage on CSE Global with a BUY recommendation.

Table 4: CSE Global earnings forecasts

CSE Global	2025A	2026E	2027E	2028E
P/E Ratio (X)	18.6	20.4	16.3	13.1
Earnings growth	34.7%	19.0%	25.3%	24.6%
EPS (in SGD)	0.053	0.063	0.078	0.098
Dividend Yield	2.6%	2.5%	3.1%	3.6%
Upside Potential Excluding Dividend				22.2%
Target Price (SGD)				1.56
Current Price (SGD)				1.28
Source: Historical data is from Bloomberg Finance L.P., Forecasted data are based on iFAST Estimates.
Data as of 4 Aug 2026.

Figure 3: CSE Global share price vs earnings per share

Amazon order flow may fall short of expectations

A key pillar of our investment thesis is CSE's long-term electrification framework agreement with Amazon. However, the agreement represents a target order value of up to USD 1.5 billion over five years rather than a legally binding minimum purchase commitment. Any slowdown in Amazon's AI infrastructure investments, changes in procurement strategy, or a lower allocation of projects to CSE could result in order intake falling short of market expectations. As the group has already expanded its manufacturing capacity ahead of future demand, slower-than-expected project awards could delay earnings growth and margin recovery.

Execution risk on large-scale electrification projects

As CSE undertakes larger data centre and LNG electrification projects, project execution becomes increasingly critical. Delays in equipment procurement, manufacturing, commissioning or customer acceptance could affect project profitability, cash flow and working capital. For example, management previously highlighted a shortage of copper rods—a key raw material used in electrical systems—which temporarily constrained production at its Champion manufacturing facility in Texas. While the supply issue is expected to ease, similar disruptions to critical components, labour availability or project execution could delay revenue recognition and weigh on earnings.

Working capital and leverage remain elevated during the expansion phase

The rapid expansion of the Electrification business has increased CSE's working capital requirements, resulting in higher borrowings to support project execution. Although management expects cash conversion to improve as major projects reach billing milestones, any delays in project completion, customer acceptance or collections could prolong the cash conversion cycle and increase financing costs, slowing the expected recovery in profitability.

iFAST Research rating system

iFAST Research employs a five-tier rating system: Buy (material upside potential, favourable risk-return); Accumulate (moderate upside, selectively add on weakness); Hold (limited upside, maintain existing positions); Trim (upside insufficient to justify a full position, reduce exposure on strength); and Sell (material downside risk, exit position).

Disclaimer

For specific disclosure, at the time of publication of this report, IFPL (via its connected and associated entities) holds a position in UltraGreen.ai (as of 18 March 2026). The analyst who produced this report hold a NIL position in the abovementioned securities.

This research report is produced under the Grant for Equity Market Singapore (“GEMS”) Scheme. iFAST Financial Pte Ltd receives financial compensation for the preparation and publication of this report. For more information regarding the GEMS scheme and its objectives, please refer to this infographic. iFAST Financial Pte Ltd maintains editorial independence regarding the analysis and conclusions presented herein.