Latest news with #PhillipResearch
The Star
19-05-2025
- Business
- The Star
T7 Global showing likely to be affected by BHS delays
PETALING JAYA: Delays in the KLIA baggage handling system (BHS) project is expected to weigh on T7 Global Bhd 's earnings. Phillip Research cut its 2025-2026 earnings per share forecasts by 16% to 17% for T7 Global to account for slower work progress and lower margins. It maintains its 'buy' call with a lower target price of 34 sen from 66 sen a share on the company after rolling forward its valuation. The key risks to its stock call include operational delays at its existing mobile offshore production units or Mopus, further postponement in BHS works, and higher-than-expected operating costs Given that the BHS project accounts for 17% and 21% of T7 Global's 2024 revenue and profit after tax, respectively, any continued delays will weigh on its industrial solution division and pose downside risks to its 2025-26 earnings forecasts, the research house stated. T7 Global completed Phase 1 of the KLIA BHS upgrading work in KLIA Terminal 1 in February 2025. However, progress on Phases 2 and 3 has slowed due to the challenges of carrying out works within a live airport environment. The remaining works are now anticipated to be delayed by between one and 1.5 years from the original completion timeline of December 2025. A formal revision to the project timeline has yet to be officially confirmed. Phillip Research expects T7 Global's energy division to anchor long-term growth. T7 Global has emerged as the largest beneficiary of the recently rolled out maintenance, construction and modification (MCM) packages, having secured RM1.7bil worth of contracts. This lifts its total outstanding order book to RM4.5bil. Its Mopus, Elise and Shirley, which began operations in July 2023 and August 2024 respectively, are expected to contribute full-year earnings in 2025. The group is actively bidding for RM13.7bil worth of contracts. These include several floating production, storage and offloading vessels, MCM services, well services, offshore facility decommissioning and government-related projects. Given its strong order book and robust tender pipeline, Phillip Research expects the group's energy division to remain its primary earnings driver, going forward.
The Star
08-05-2025
- Business
- The Star
OCK expanding operations in DC space
Phillip Research remained 'positive' on OCK's outlook. PETALING JAYA: OCK Group Bhd is expected to report an 18-month core earnings of RM51mil for its financial year 2025 (FY25). It is changing its year-end to June from December. On a comparable 12-month basis, Phillip Research cut its FY25 and FY26 earnings per share forecast by 31% and 42% to reflect a realistic billing momentum in the contracting and network engineering services segment. In tandem with its earnings revision, it trimmed its dividend per share forecasts to 1.5 sen and 1.3 sen for FY25 and FY26 respectively from 1.8 sen and two sen previously, implying a 30% payout ratio. Historically it had paid out 18% to 45% of its net profit. The reduced payout assumptions reflected a prudent capital management approach, considering the gradual 5G rollout in regional markets and prevailing macroeconomic headwinds. It has maintained a 'buy' call on the stock with a target price of 66 sen a share. The counter last closed at 41 sen a share during yesterday's trading. The key risks to its call include unexpected delays in project rollout and execution, slower-than-expected tower portfolio expansion, weaker-than-expected margins, regulatory changes as well as foreign currency fluctuations. The research house also liked OCK for its strategic exposures to telecommunications infrastructure projects, stable regional tower leasing business, promising earnings potential from ongoing 5G rollouts and network enhancement activities. 'OCK's substantial recurring income, with 60% to 65% of its revenue derived from tower leasing and managed services, will position it as a beneficiary of domestic and regional 5G deployment,' it said. Going forward, OCK is expected to benefit from U Mobile Sdn Bhd's 5G rollout. However, near-term earnings should be minimal, as the initial phase will likely focus on site enhancement. It is discussing securing work for 500 new towers, strengthening its engineering and managed services segments. The group will also benefit from Jendela phase two, which involves the rollout of 2,700 sites nationwide. 'OCK has a good chance of securing RM70mil to RM100mil of infrastructure jobs under the Smart City initiatives,' the research house added. In Indonesia, OCK manages about 54,899 towers, holding a 46% market share. Its managed tower portfolio is expected to grow 8% annually in FY25 and FY26, and 9% in FY27, driven by continued infrastructure expansion and operational scale, according to the research house. In Vietnam it has 3,650 towers, with a tenancy ratio of about 1.2 times and the tenancy ratio is expected to stay flat over FY25-FY27. OCK owns 1,200 towers in Myanmar, with a tenancy ratio of 1.4 times. The group's current RM82mil order book for data centre (DC) projects will primarily focus on power solutions. OCK is expanding its involvement in the DC space by diversifying from power solutions into fibre connectivity, further solidifying its position in the fast-growing sector. Phillip Research remained 'positive' on OCK's outlook, as its strategic pivot towards the DC sector gains traction.
