CSE Global Limited’s (CSE) 3Q14 results were in-line with our expectations. Revenue grew 15.2% YoY to S$112.3m on higher sales achieved from Asia Pacific and the Americas regions, but partially offset by weakness in its Europe/Middle East/Africa market. Correspondingly, CSE’s core PATMI from continuing operations jumped 39.6% YoY to S$9.4m. This was attributed to growth from its revenue, better operating margins and a big decline in finance expenses.

CSE’s 9M14 revenue grew 9.2% YoY to S$313.6m while core PATMI from continuing operations increased 4.7% to S$25.0m. This formed 77.2% and 72.8% of our FY14 projections, respectively. New orders received for 3Q14 and 9M14 increased 29.1% and 6.3% YoY to S$119.3m and S$288.1m, respectively, while outstanding orders at the end of the 3Q14 stood at S$201.7m (end 2Q14: S$194.7m).

Looking ahead, CSE remains cautiously optimistic that its FY14 performance would be better than FY13. Pending a results briefing with management later, we maintain HOLD on CSE but place our fair value estimate of S$0.64 under review.

Source: OCBC Research - 12 Nov 2014