CSE Global cut to ‘hold’ by OCBC on soft earnings outlook

SINGAPORE (May 12): OCBC is downgrading CSE Global to “hold” on underwhelming 1Q results and soft earnings outlook.

In a Thursday report, analyst Eugene Chua says with new orders received in 1Q16 dropping 23.8% to $74.9 million and outstanding orders decreasing 28.9% to $179.6 million, OCBC expects its FY16 earnings to soften.

Also, given that more than 80% of its 1Q16 revenue was contributed by customers in the O&G sector, Chua expects the number of available greenfield projects in the market to decline due to low oil and commodity prices. But this may lead to CSE taking on projects with lower margins.

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