T7GLOBAL: Operational Strengths Underpin Positive Outlook, Analysts Recommend Buy
| Investment Bank | TA SECURITIES |
|---|---|
| TP (Target Price) | RM0.25 (+25.0%) |
| Last Traded | RM0.20 |
| Recommendation |
An investment bank has issued a positive outlook on a key industry player, citing robust operational performance within its energy segment and a healthy order book. Despite some headwinds in its industrial solutions division, the company’s underlying strengths suggest a favorable trajectory for investors.
Strong Energy Segment Performance
The energy division has demonstrated stronger sequential results, largely driven by accelerated progress on its Pan-Malaysia maintenance, construction, and modification (MCM) contract, which began contributing significantly in May 2025. This robust performance is underpinned by consistently high asset uptime, with the TSeven Elise and Shirley Mobile Offshore Production Units (MOPUs) maintaining exceptional uptime of 99.5% and 99.0% respectively, in 3Q25. Furthermore, the company’s jack-up rig operated at a high 98% utilization level, successfully completing five additional wells in 3Q25, bringing the total to 15 wells for the nine-month period ending 3Q25. Management anticipates that the energy division’s operating margin will remain stable at approximately 24%, bolstered by these efficiencies.
Industrial Solutions Face Headwinds
Conversely, the industrial solutions (IS) division is projected to remain subdued in 4Q25. This slowdown is attributed to slower project execution and softer activity within the Specialist Products and Technology (SPT) division. Significant delays persist on the KLIA Baggage Handling System (BHS) project, with only 10% completed in 9M25, bringing overall progress to approximately 50%. Operational constraints at KLIA continue to limit the pace of construction. However, other key projects like the TNB smart meter project have reached 90% completion, and the ASR radar replacement program is at 47% completion, indicating mixed progress within the division. The company remains active in pursuing new tenders for high-value infrastructure projects, including further smart metering initiatives.
Robust Order Book and Future Prospects
Despite the challenges in the industrial solutions segment, the company is well-positioned to capitalize on robust domestic and offshore activities, supported by a healthy order book of approximately RM4 billion. The energy segment accounts for 90% of this order book, with the remaining 10% from the IS segment, providing long-term earnings visibility. This substantial pipeline is expected to drive future revenue growth. Key risks identified include potential fluctuations in work orders, unforeseen delays in the BHS project, and variations in operating costs.
Analyst View
Reflecting confidence in the company’s operational strengths and future prospects, TA SECURITIES has issued a BUY recommendation. The investment bank has set a target price of RM0.25, indicating a potential upside of 25.0% from the last traded price of RM0.20, anticipating continued value creation driven by its resilient energy business and strategic pipeline.
