CSE Global Limited reported a 6.0% YoY decline in its PATMI from continuing operations to S$8.0m despite a 16.3% jump in revenue to S$108.1m. The former fell short of our expectations, largely due to a higher-than-expected effective tax rate. For 1H14, revenue grew 6.2% to S$201.3m, while PATMI from continuing operations fell 9.1% to S$15.6m. This constituted 50.0% and 43.2% of our FY14 forecasts, respectively. An interim DPS of 1.25 S cents was declared (payable on 27 Aug 2014), a slight decline from the 1.5 S cents declared in 2Q13

CSE also registered a 9.3% YoY decrease in its new orders received to S$95.4m, while outstanding orders were S$194.7m (-28.6% YoY), as at end 2Q14. We will provide more details after the analyst briefing. As CSE’s share price has performed strongly since we last reiterated our ‘Buy’ recommendation (+27%), we now place our BUY rating and S$0.63 fair value estimate under review.

Source: OCBC Research - 12 Aug 2014