• T7 Global has secured Package B3 for the provision of MCM services for Jadestone Energy
• The contract value is estimated to be RM500m, with a tenure of 5+3+2 years, bringing the latest order book to an estimated RM5bn
• Maintain BUY rating with SOP-derived target price of RM0.68

Secured MCM job from Jadestone Energy

T7 Global (T7) has announced that its wholly-owned subsidiary, Tanjung Offshore Services Sdn Bhd, has been awarded a Maintenance, Construction, Modification (MCM), and Hook- Up Commissioning (HUC) services contract for Package B3 by Jadestone Energy (Malaysia) Pte. Ltd. The contract is effective from 17 Oct 24, with a duration of 5 years, with an option to extend for an additional 3+2 years.

Third Pan Malaysia package win

While no official contract value was disclosed, we estimate the contract to be worth c.RM500m, translating to an annual revenue of RM100m. Assuming a 9% net profit margin (in line with management’s guidance), this contract is expected to generate an annual PATAMI of RM9m over 2025–29, representing 18% of our 2025E earnings forecast. This marks T7’s third Pan Malaysia package win, bringing cumulative contract wins to RM1.3bn. The latest order book is estimated to be at c.RM5bn. While we do not anticipate additional Pan Malaysia package wins, we remain positive on T7’s contract flow prospects, supported by its robust RM14bn tender book. Notable tenders include MOPU and FPSO projects, MCM- related work, well plug & abandonment (P&A), and offshore facility decommissioning.

Maintain BUY with RM0.68 target price

We do not change our earnings forecast as this contract win falls within our order book replenishment assumption. We reiterate our BUY rating and SOP-derived target price of RM0.68, which implies an 11x forward 2025E EPS. We continue to like T7 for its positive earnings prospects, supported by its sizeable order book that offers long-term visibility, with >50% comprising of MOPU and Pan Malaysia packages providing 5–10 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.

Source: Philip Capital Research - 3 Dec 2024