OVERVIEW:
In 1985, CSE commenced as a engineering project division of Chartered Electronics Industries, the electronics arm of Singapore Technologies (ST). It formed company in 1997 and listed in SGX two years later. Throughout a series of acquisition, it has transformed itself to be global organisation with over 1300 employees worldwide, such as US, Australia, China and India.
CSE offered integrated solutions to industries in Automation, Telecommunications and Environmental sectors. Recognized as one of the market leaders, it provides SCADA (Supervisory Control & Data Acquisition) systems to a wide range of industries, such as fire alarm, offshore, etc. It also develops, manufactures and sells electronics and micro processor monitoring equipment.
HIGHLIGHTS:
[1] Amid recent global economy slowing down especially in oil industry, the counter registered its FY2015 with revenue and profit at $412m and $34m which is down 1% and 3% year on year. Gross margin maintained at 28%.
[2] In geographical segments, Americas and Europ/Middle East/Africa saw increasing revenue at 6 and 8% year on year, but being offset by Asia-Pacific which down 15% year on year. It was mainly attributed to lower revenues in Australia, coupled with unfavorable exchange impact due to weakening of Aus Dollar.
[3] Its major revenue (80%) came from Oil & Gas industry. FY2015 saw this segment contributed revenue at $333m which is up 4% year on year.
[4] As a result of achievement of project delivery, operating cashflow registered at $41m, up 283% year on year. It is currently in net cash position with $54.2m and low gearing ratio at 22%.
INVESTMENT THEMES:
[1] Valuation is undemanding as below
[2] New acquisition of CC American (operated in US energy industry) should contribute extra earning at 0.06 per shares for FY2016. The management indicated that mining activities in Australia and Canada seems to be picking up.
[3] In Singapore, CSE is one of the suppliers to NCS-MHI consortium that won $556m ERP 2 contract awarded by the Land Transport Authority (LTA).
PRICE TREND:
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