• T7 Global has secured a MCM services contract from Carigali Hess Operating Company

• Contract value is estimated to be RM250m, with a duration of 3 years, bringing latest order book to an estimated RM4.7bn

• Maintain BUY rating with SOP-derived target price of RM0.66

Secured MCM Job From Carigali Hess Operating Company

T7 Global (T7) announced that its wholly-owned subsidiary, Tanjung Offshore Services Sdn Bhd, has received a letter of award from Carigali Hess Operating Company Sdn Bhd (CHOC) for the provision of maintenance, construction, and modification (MCM) services. The contract is effective from 15 Jan 25 and has a duration of 3 years.

Maiden Contract Win for 2025

Although the official contract value was not disclosed, we estimate it to be c.RM250m, translating to an annual revenue of c.RM83m. Assuming a group blended PATAMI margin of 6%, this contract is estimated to contribute an annual RM5m PATAMI over 2025-27, representing c.10% of our 2025 earnings forecast. This contract award marks T7’s first MCM contract win in 2025, adding to the MCM jobs secured from Pan Malaysia packages in 2024 valued at c.RM1.3-1.4bn. We maintain a positive outlook on T7’s contract flow prospects, supported by its robust RM14bn tender book, which includes MOPU and FPSO projects, MCM-related work, well plug & abandonment (P&A), and offshore facility decommissioning jobs.

Maintain BUY With RM0.66 Target Price

We do not change our earnings forecast as this contract win falls under our current assumption. We reiterate our BUY rating and unchanged SOP-derived target price of RM0.66, which implies a 2025E PE of 11x. We continue to like T7 for its positive earnings prospects, supported by its sizeable RM4.7bn order book, offering long-term visibility, with >50% comprising 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: Phillip Capital Research - 7 Jan 2025