• Overview. T7 Global (T7) 4Q22 profits soared by >100% on YoY and QoQ basis to RM11mn mainly driven by higher offshore maintenance and well abandonment activities. Revenue rose by 82% YoY and 112% QoQ to RM170mn as the company completed the offshore turnaround activities for Hibiscus Petroleum as well as partially completed the M3 Oilfield well abandonment for Petronas.

• FY22 performance. FY22 profit almost doubled to RM20mn on stronger demand for offshore maintenance services.

• Against estimates: Above. FY22 earnings are above our estimate at 116%. The deviation against our forecast was due to higher-than-expected revenue.

• Dividend. No dividend was declared for the quarter.

• Bayan MOPU. The MOPU has reached the site since December 2022 and is expected to receive its first gas by 2Q23.

• Non-O&G business. The company has completed the construction of fish processing park in Endau, Johor for East Coast Economic Region Development Council (ECERDC) in 4Q22. However, its construction unit will keep busy with a new orderbook after securing KLIA baggage handling system (BHS) contract from MAHB under a consortium with Siemens.

• Outlook. T7’s orderbook stood at RM2.6bn as at end FY22 comprised of (i) long-term lease charter and operation and maintenance contracts of 2 MOPUs, (ii) integrated well services (IWS) for well abandonment and well workover operation and (iii) offshore platform maintenance contract.

• Our call. We maintain T7 as a BUY with unchanged TP of RM0.50. We remain optimistic with the stock given its track record in offshore maintenance services as well as new income growth from MOPU assets.

Source: BIMB Securities Research - 28 Feb 2023