PETALING JAYA: T7 Global Bhd
’s recent contract win could be worth about RM500mil that is expected to contribute an annual revenue of RM100mil.
Based on a net profit margin of 9%, this contract is expected to generate an annual profit after tax and minority interest of RM9mil over 2025 to 2029, said Phillip Capital Research in a report yesterday.
This accounts for about 18% of the group’s 2025 earnings estimate, the research house noted.
With the latest contract award, T7’s total Pan Malaysia package wins now stand at about RM1.3bil to RM1.4bil.
Meanwhile, Phillip Capital Research remained positive on T7’s contract flow prospects, backed by its solid RM14bil tender book.
This includes mobile offshore production unit (MOPU) and floating production system projects, maintenance, construction, modification (MCM) related work, well plug and abandonment, and offshore facility decommissioning.
T7 Global through its wholly-owned subsidiary, Tanjung Offshore Services Sdn Bhd, has been awarded a MCM, and HookUp Commissioning services contract for Package C1 (Peninsular Malaysia Asset) by PETRONAS Carigali Sdn Bhd.
The contract is effective Sept 27, 2024, with a duration of five years, and an option to extend for an additional three plus two years.
Phillip Capital Research said it has made no changes to its earnings forecasts on T7 as the latest contract win falls within its assumption.
The research house has reiterated a “buy” call on the stock with an unchanged target price of 68 a share.
This implies a 2025 price earnings ratio of 11 times, it added.
Phillip Capital Research said it continues to like T7 for its positive earnings prospects, supported by its sizeable RM4.5bil order book that offers long-term visibility, with over 50% comprising MOPU and Pan Malaysia packages providing five to 10 years of earnings clarity.
The key risks to its call include unforeseen operational delays in existing MOPUs, unforeseen delays in the baggage handling system project and work orders and higher-than-expected operating costs.
