OCBC Report

KEY IDEA CSE Global: Beginning on a fresh page Following the successful divestment of CSE Global’s entire stake in Servelec Group in Dec last year, we believe management will focus on driving its growth largely from the oil and gas sector. CSE has significant exposure to the Gulf of Mexico (both the U.S. and Mexico side), and we expect it to benefit from positive trends arising from this area. Looking ahead, we also do not expect CSE to make any further provisions for cost overruns for its Middle-Eastern project, which would aid its margins recovery. We re-work our assumptions following a change in analyst coverage, and now forecast CSE to register core PATMI growth of 18.7% and 9.3% in FY14 and FY15, respectively. Applying a 9x target PER peg to our FY14 EPS forecast, we derive a fair value estimate of S$0.63 (previously S$0.96 before the Servelec Group divestment). Maintain BUY. (Wong Teck Ching Andy)

For more information on the above, visit www.ocbcresearch.comfor the detailed report.

NEWS HEADLINES - The US stock market extended losses and finished lower Thu, amid concerns that improving economic indicators might force the Fed to start raising rates sooner than anticipated. - SGX, which has been actively building its derivatives business as its securities division remains under pressure from low trading volumes, is said to be considering gold futures contracts. - DBS Bank has introduced a new programme, DBS Multiplier Programme, to reward the emerging affluent for consolidating their finances with the bank. - Sembcorp Industries has started building its largest energy-from-waste plant in Singapore. - Addvalue Technologies said that the group's technology is attractive to players interested in expanding into the field of high-end broadband satellite communications. - Asiasons Capital's attempt to acquire 20% of the issued common units in the share capital of Black Elk Energy Offshore Operations has been unsuccessful.