T7 Global set for strong performance

PETALING JAYA: Phillip Capital Research is maintaining its positive view on T7 Global Bhd’s earnings growth prospects for 2025.

The research house said its positive outlook is supported by two mobile offshore production units (Mopus), maintenance, construction, and modification (MCM) jobs, plug and abandonment work, and faster revenue recognition from its baggage handling system (BHS) project.

A Mopu is a type of purpose-built portable offshore structure that can be reused for oil and gas extraction from the seabed.

Mopus are commonly used in shallow-water projects in the Middle East and Asia.

The research house is maintaining its “buy” call on the stock with a target price of 66 sen per share.

“We continue to like T7 Global for its positive earnings prospects, supported by its sizeable order book, mainly comprising Mopu and Pan Malaysia packages providing five to 10 years of earnings clarity.

“Key risks to our ‘buy’ call include unforeseen operational delays in existing Mopus, unforeseen delays in the BHS project and work orders, and higher-than-expected operating costs,” it added.

The company announced that its wholly-owned subsidiary, Tanjung Offshore Services Sdn Bhd, has received a letter of award from Hibiscus Oil & Gas Malaysia Ltd for the provision of MCM services.

The contract, effective from Dec 19, 2024, runs for six months with an option to extend for another six months at Hibiscus’ discretion.

While the official contract value has not been disclosed, the research house estimates it at around RM40mil to RM50mil.

“Based on a group blended profit after tax and minority interest (Patami) margin of 6%, this contract is estimated to contribute RM3mil in Patami for 2025, accounting for about 6% of our earnings forecast.

“This represents T7 Global’s second MCM contract win in 2025, adding to the MCM jobs secured under the Pan Malaysia packages in 2024 and the recently awarded contract from Carigali Hess, with a combined value of about RM1.6bil to RM1.7bil.”