• Company profile. T7 Global Berhad (T7G), previously known as Tanjung Offshore, involved in various industries such as oil & gas, aerospace, property, construction and ICT. The company has swung back into the black in FY16 after a registering huge one-off impairment loss in the FY15 results. The healthy revenue growth of 37% to RM83m, with a net profit of RM5.1m (vs. LAT of RM76.3m in FY15) in FY16 was contributed by the contracts (ORIGINS and CWG) secured from Petronas. T7G has a healthy balance sheet with the net cash of 9.0 sen per share.

• Reaping fruits from the recent investments. T7 Global invested US$500k in July 2017, acquiring 9.86% of Triangle Energy (TE) an Australian based O&G production and exploration company and TE hits oil in the coastal Xanadu-1 in the Perth Basin.

• Contract from MMC Gamuda KVMRT. T7G also secured two contracts, worth a total of approximately RM7.2m from Petronas and MMC Gamuda KVMRT (UGW) Joint Venture for the refurbishment and delivery of new storage tanks for the MRT Line 2.

• Technical outlook. T7G noted strong volume pick up in August above RM0.40 and maintained the price above the SMA200 level after rebounding off the RM0.365 levels in early September. With the recent return in buying interest near RM0.38, we may anticipate a flag formation breakout above RM0.40, targeting RM0.425-0.445, followed by a LT target of RM0.49. Meanwhile, support will be set around RM0.375- RM0.38, with a cut loss below RM0.37.

Source: Hong Leong Investment Bank Research - 27 Sept 2017