PETALING JAYA: Pantech Group Holdings Bhd
’s earnings momentum is expected to continue throughout financial year 2025 (FY25), driven by increasing oil and gas (O&G) activities as oil majors seek to capitalise on high global oil prices, according to Phillip Capital Research.
It noted that with the addition of the four new stainless steel production lines in February this year, Pantech is well-positioned to accommodate the rising sales volume.
This is particularly so for the United States and European markets.
“The company plans to boost its manufacturing capacity by another 20% to 25% through the listing of two of its manufacturing subsidiaries, Pantech Steel Industries and Pantech Stainless and Alloy (PSA).
“This expansion aligns with the anticipated rise in the export sales volume as the group aims to expand its global footprint,” the research house noted in a recent report on the company.
The companies’ two manufacturing subsidiaries would be listed on the Main Market via a special-purpose vehicle by year-end.
The brokerage is reiterating its “buy” rating on the company with a 12-month target price of RM1.42 a share.
This is based on an unchanged nine times price-earnings multiple on the FY26 estimated earnings per share.
It said key risks to its “buy” call include lower-than-expected demand for pipes, valves and fittings (PVF), unforeseen project delays and higher-than-expected operating costs.
Pantech posted a net profit of RM26.3mil for its first financial quarter ended May 31, representing a fractional year-on-year (y-o-y) slide of 2.6% against the same quarter last year.
This was despite revenue growing by 4.5% y-o-y to RM255.7mil, with the group pointing to a lower contribution from its manufacturing division as the reason profitability had stayed flat.
Reiterating its “buy” call on Pantech with a higher target price of RM1.27 per share, TA Research said it is sanguine on the long-term outlook of the company.
This is due to the resilient oil prices encouraging upstream capital expenditure and downstream growth from policy supports such as the New Industrial Master Plan 2030 and the Chemical Industry Roadmap 2030.
The company is a one-stop centre for PVF and provides solutions for gas and fluid transmission.
