By:

Kenny Ong

CSE GLOBAL

The objective of the presentation is for educational purposes. The full content of the presentation is for illustration purposes only and should not be used as investment recommendations. AB Maximus and its presenters are not responsible for all investment activities conducted by the participants and cannot be held liable for any investment loss.

The company and presenters may have personal interest in the particular shares presented.

DISCLAIMER

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Company Background

Growth Drivers

DCF Valuation

Relative Valuation

Risks

Conclusion

CONTENT

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4

COMPANY BACKGROUND

CSE Global is a global system integrator operating in the Americas, Europe, the Middle East, Africa, Asia Listing Date: 2000 Shares: 516 Million Market Cap: $420 Million Year End: 31 Dec

5

WHAT DOES CSE DO?

Automation

Healthcare

Environmental

Telecommunications

4 Segments

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WHAT DOES CSE DO?

Automation

Process Control System

Safety Shutdown

Fire and Gas Detection System

Scada/telemetry/pipeline Control System

Wellhead Control System

Subsea Control System

Traffic Management and Control System

I& E Construction

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WHAT DOES CSE DO?

Construction Communications

VSAT Satell ite Communications Network

Fiber Optics System

Conventional & Trunked Radio Systems

CCTV, Access Control & FIDS System

LAN/WAN Networks

IP Based Networks

Telecommunications

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WHAT DOES CSE DO?

Meteorological Systems

Multiple Hearth Furnace

Carbon And Energy Recovery Systems

Fluid Bed Incinerator

Rotary Kilin Incinerator

Environmental

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WHAT DOES CSE DO?

Hospital Information Systems – Patient Administration and Electronic Patient Record

Community & Mental Health Care Record System

Healthcare

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DRIVER 1 - AGGRESSIVE STANCE

Year Company Country Industry

2000 W-Industries

CSE (UK)

US

UK

Systems Integrator

2002 Control Concepts US Engineering Systems

2003 Transtel

TTC S.R.O

Singapore

Slovakia

Telecom

Oil & Gas

2004 Uniserve Australia Power and Water

2006 Techno TradeSA

Scomagg

Belgium

Scotland

Telcoms

Systems Svc

2008 WAF

Hankin

New Zealand

US

Control Eng.

Incineration

2010 System Integration & Automation UK Controls Eng.

2011 Astib Australia Telcoms

2012 Power Diesel (66%) Global Oil & Gas

2013 Tynemarch UK Water and Env.

Due the company’s low gearing, analysts expect CSE to be able to borrow up to $40 mill ion to fund its acquisitions this year

Inorganic growth to improve revenues and derive synergies between business units

Contracted its past CEO to carry out M&A transactions

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DRIVER 1 - AGGRESSIVE STANCE

Due the company’s low gearing, analysts expect CSE to be able to borrow up to $40 mill ion to fund its acquisitions this year

Inorganic growth to improve revenues and derive synergies between business units

Contracted its past CEO to carry out M&A transactions

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DRIVER 1 - AGGRESSIVE STANCE

Proposition 1:

CSE has the financial strength, intention and a steady

track record of using M&As to boost inorganic growth

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DRIVER 2 – END OF ZERO MARGIN

Historically CSE strength and highest margin contribution is in the offshore projects

Due BP oil spil l, there is lull in offshore projects at the Guld of Mexico, thus CSE has been undertaking low margins proejcts.

Undertook a few zero margins onshore projects

Middle East projects

Greenfield gas projects in USA

Hurt profitability although Revenues are not badly affected

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DRIVER 2 – END OF ZERO MARGIN

Zero Margin projects are ending.

In the 1Q 2013 report, as compare to 1Q2012, revenue are dropping, however, Net Profit increases drastically.

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DRIVER 2 – END OF ZERO MARGIN

Net profit margin improves as zero -margin projects end

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DRIVER 2 – END OF ZERO MARGIN

Net profit margin improves as zero -margin projects end

Proposition 2:

CSE will see a constant Gross Margin but Net Margins

will improve to levels before FY2011

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DRIVER 3 – STRONG OUTLOOK

CSE has a strong track record of obtaining orders

Every quarter CSE can obtain at least $100 mill ion worth of orders

11.1% growth of new order for Q1 of FY2013

Reduce outstanding orders by 9%

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DRIVER 3 – STRONG OUTLOOK

Number of Offshore rigs increasing since Feb -11

Traditionally CSE’s strongest segment

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DRIVER 3 – STRONG OUTLOOK

According to a report by Infields, Australasia's subsea market share will increase by 7% over the next 5 years

Notably, Asia is driven by fast -growing LNG export industry, which is racing to meet rising demand for natural gas in emerging Asian economies

CSE has been winning LNG projects

CAGR 2.8%

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DRIVER 3 – STRONG OUTLOOK

According to a report by Infields, Australasia's subsea market share will increase by 7% over the next 5 years

Notably, Asia is driven by fast -growing LNG export industry, which is racing to meet rising demand for natural gas in emerging Asian economies

CSE has been winning LNG projects

CAGR 2.8%

Proposition 3:

CSE will see strong and large orders coming in from its

traditionally strong segments. LNG wins will give it

more opportunities to win more LNG projects.

Risk Free Rate 2.50%

Beta 1.25

Equity Risk Premium 10.60%

Tax Rate 24.00%

Cost of Equity 12.63%

Weight of Debt 20%

Weight of Equity 80%

WACC 10.48%

Terminal Growth 2.00%

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WACC CALCULATION

S$ Millions 2012 2013 F 2014 F 2015 F 2016F

Revenues

Automation 367 303 313 324 335

Telecoms 141 140 140 140 140

Healthcare 34 30 30 30 30

Environmental 22 23 25 28 30

Total 564 495 508 521 535

Net Margin 9.95% 9.56% 9.56% 9.56% 9.56%

Net Income 56 47 49 50 51

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NET INCOME PROJECTIONS

2013 F 2014 F 2015 F 2016F

TV 604

PV 43 40 37 405

Firm Value 525

Less Debt 96

Add Cash 74

Intrinsic Value $0.98

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DCF

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RELATIVE VALUATION

Company P/E Normalized

(FY)

Boustead Singapore Limited 12.9

Cosco Corporation (Singapore) Limited 15.6

DMX Technologies Group Limited 9.7

Ezion Holdings Ltd 17.0

Ezra Holdings Limited 11.6

IEV Holdings Ltd 16.3

Jaya Holdings Limited 9.5

Keppel Corporation Limited 8.9

PEC Ltd. 13.4

SembCorp Marine Ltd. 17.3

Sound Global Ltd 9.6

Swiber Holdings Limited 9.5

Average 12.6

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RELATIVE VALUATION

Average PE:

12.6

EPS1:

$0.10

Fair Value:

$1.26 X =

M&A Risk

There may be risks that M&A will not successfully occur, leading to financial losses for the company

Foreign Currency Translation

Group is exposed to many different currencies like EUR, USD etc. At the group level, consolidation lead to translational differences

Margin Squeeze

There may be a margin squeeze again like in previous projects. This may be due to increase competition and other disasters

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RISKS

Dividend Yield (5.2% vs 1.9%)

CSE offers stellar dividend yield. Even more attractive than big time offshore players like Keppel and Semb Marine

Current Ratio (2.3 vs 2.1)

CSE is has better liquidity than its peers

Debt to Equity (39% v 47%)

CSE is less geared than its peers giving it room to borrow

Receivables turnover ( 2.4 v 3.6)

CSE is less efficient at collecting trade receivables as compared to its peers

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RATIO ANALYSIS

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CONCLUSION

DCF Fair Value (0.9)

$0.98

P/E Fair Value (0.1)

$1.26

Fair Value

$1.00