PETALING JAYA: Earnings for Pantech Group Holdings Bhd
are expected to remain steady on the back of higher oil and gas (O&G) projects.
TA Research said this was given the resiliency in oil price due to Saudi Arabia’s commitment to cut oil production and maintain a floor on the oil price.
Pantech recorded a 23.8% quarter-on-quarter hike for the first quarter of financial year 2024 (1Q24) revenue to RM244.8mil, driven by higher deliveries to the O&G sector for the trading division, which saw a 48.3% quarter-on-quarter (q-o-q) rise.As for its operating profit for the quarter, it has advanced by 15.6% q-o-q from 33% to 38.2%, on back of revenue growth and better product mix for the manufacturing division.
The investment holding company, however, saw a drop in its revenue by 9.6% year-on-year (y-o-y) from RM270.7mil due to lower contribution from the manufacturing segment by 22.5% y-o-y, as exports softened. However, Pantech’s trading segment registered a 14.4% y-o-y growth which was supported by higher deliveries to local O&G projects.
TA Research noted in a report on Pantech that the group’s operating profit, nonetheless, grew by 1.4% y-o-y on the back of a better product mix for the manufacturing segment that led to better operating margins. Pantech recorded a core net profit of RM23.5mil, an increase of 8.7% y-o-y but a drop of 18.7% q-o-q in 1Q24.
TA Research said the group’s core net profit came within 26% and 20% of its and consensus’ full-year forecasts, respectively.
Pantech also declared a first interim dividend of 1.5 sen per share, which happened to be the same as the corresponding period the year before. TA Research raised its FY24 and FY25 earnings forecast slightly by 1.9% and 2.5%, respectively, as well as introducing an earnings forecast for FY26 with an amount of RM97.6mil, after adjusting for FY23 numbers from the annual report.TA Research maintained a “buy” call on Pantech at a new target price of RM1.08 per share, based on a 10 times calendar year 2024 earnings per share.
