CSE GLOBAL: UBS Initiates Coverage, Sees an AI Power Story Beyond Amazon

CSE Global is a systems integrator that designs, engineers, and supplies mission-critical Electrification, Communication and Automation solutions for customers across various industries such as infrastructure, energy, mining and minerals, and now data centres.

In the report by analysts Rachael Tan and Melissa Leong, UBS says:

“CSE's status as a strategic supplier to Amazon is not merely a revenue opportunity for the company -- it also serves as a credible reference point for prospective customers, supporting further opportunities both within data-centre campuses, and 'outside the park' infrastructure that powers them."

The US$1.5 billion opportunity from Amazon relates to purchases required for full vesting of Amazon’s CSE warrants by November 2030.

Maybank also views opportunities for CSE to expand its customer base, expecting another data-centre client by 1Q2027.

UBS puts numbers around the CSE' Champion facility in Houston which is dedicated to Amazon work.

Three of four production lines were operating, with full utilisation expected in time for 2027 production as copper-component shortages are resolved.

At full single-shift utilisation, UBS estimates annual revenue capacity of US$350 million–US$400 million. Amazon’s option to request dual-shift operations offers further upside.

CGS International is aligned on timing: it expects Champion’s full ramp-up in 2027. In addition, it anticipates another roughly US$300 million Amazon order by end-2026 for delivery the following year.

Against that backdrop, Maybank says that CSE expects to more than triple capacity by 2027/28.

In 2025, even as it ramped its workload, the time CSE took to collect money from customers roughly matched the time it had to pay suppliers. 

UOB Kay Hian supplies related evidence: 1H operating cash flow turned positive at S$15.9 million, helped by stronger collections and lower contract assets.

UBS estimates CSE can afford to spend S$15 million–S$20 million a year for bolt-on acquistions (ie buying smaller businesses that fit with its existing operations).

But that estimate leaves out changes in the cash needed to run the business, such as paying for materials and work before customers pay.

Winning another large customer could require more borrowing, while a major expansion could mean raising money by issuing new shares.

CGS expects copper to ease from around US$14,400 per tonne to an FY2027 average of US$12,800, citing high exchange inventories and softer Chinese demand.

That could allow partial provision reversals.

Prime Asia is more cautious. It expects copper to remain elevated and warns of further provisions in the first half of FY2027.

Its argument: inventory accumulating in the US ahead of possible tariffs does not necessarily ease availability elsewhere.

Still, Prime Asia sees a potential eventual benefit from higher—but more stable—copper prices, once cable repricing catches up.

UBS forecasts net profit of S$36 million in 2026, S$55 million in 2027 and S$69 million in 2028.

Its valuation blends discounted cash flow with a 22-times multiple on 2028 earnings, rather than assuming the AI spending boom lasts indefinitely.

UBS' target is based on 16 times 2027 earnings, against 24 times for peers.

It acknowledges that smaller size, trading liquidity and customer concentration help explain some of that discount.

The striking contrast: Maybank has the highest target price, but KGI has the highest earnings forecasts in all three years—despite assigning the lowest target price.

UBS’s FY2027–28 earnings forecasts sit between Maybank’s and CGSI’s.

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