Increased O&G Activities in the US Could Boost CSE Global’s Revenue and Opportunities in the Sector

Maybank analysts have forecasted a potential boost for Singapore-listed CSE Global following US President Donald Trump’s recent executive actions to ramp up oil and gas (O&G) production. The new policies, aimed at addressing the US’s energy needs, include the approval of various projects such as drilling operations, pipelines, refineries, and power plants, all designed to enhance energy production and lower costs for consumers.

In a report issued on January 20, Maybank’s Jarick Seet explained that this US energy policy shift could positively impact CSE Global, which has previously been heavily involved in O&G projects in the US. He highlighted that while recent years had seen a slowdown in O&G-related projects, leading CSE to pivot towards electrification, this new policy could reignite the sector and bring substantial benefits. Seet predicted that as a result of these policy changes, CSE could see increased revenues from maintenance work as the number of O&G projects rises, in turn lowering electricity costs in the process.

The declaration of a “national energy emergency” and the associated executive orders are expected to boost US energy production significantly, with a target of reducing electric and petrol prices by 50% within the first year of Trump’s presidency. Maybank believes this will drive more O&G projects, which could align with CSE’s business focus.

Additionally, CSE Global announced plans to divest a US property for US$29.3 million on January 3, intending to reinvest the proceeds into a larger facility in the US, likely situated in a state with favourable tax incentives. Seet noted that this expansion could more than double the size of CSE’s current property, enhancing its capabilities to tap into growing opportunities in electrification and data infrastructure across the US.

Maintaining a “buy” rating on CSE Global, Maybank set the target price at S$0.64, citing strong growth potential, particularly from the company’s expansion into the US market. Seet expressed confidence in CSE’s multi-year growth cycle, driven by improving financials and reduced gearing, with the potential for share buybacks and stronger margins in the future.

CSE Global’s stock saw a slight increase of 1.1% to S$0.45 on Wednesday, reflecting investor optimism. The company has also earned a place on Singapore’s Fastest Growing Companies list, highlighting its impressive revenue growth of over 44% between 2020 and 2023.