Pantech to see flat 4Q, dragged by lower O&G projects
Pantech Group Holdings Bhd (Pantech) is expected to see a flat fourth quarter of the financial year 2024 (4QFY24), dragged down by less major domestic oil and gas (O&G), analysts observed.
In a report, the research team at TA Securities Holdings Bhd (TA Securities) said: “We expect 4QFY24 results to be flattish or only improve slightly quarter-onquarter (q-o-q) due to less major O&G projects locally.
“Nonetheless, the group should register better performance in FY25 as the tenders for major projects such as PIPC are expected to commence in mid-2024.”
Meanwhile, on Pantech’s 3QFY24 results, the research team noted that the group registered a poorer performancboth q-o-q and y-o-y.
“We understand that the tenders for major O&G projects such as the Pengerang Integrated Petroleum Complex (PIPC) have been delayed,” it added.
“On the back of revenue decline, quarterly PBT dropped 41.8 per cent y-o-y. Similarly, 9MFY24 revenue and PBT slipped 14.8 per cent y-o-y and 19.2 per cent y-oy respectively due to the same reasons mentioned above,” it said.
On a quarterly basis, Pantech’s 3QFY24 revenue dropped 11.6 per cent q-o-q mainly attributed to lower demand in both divisions.
“Notably, poorer product mix in the Trading division led to 3.3 per cent-pts drop in the operating margin q-o-q to 8.3 per cent in 3QFY24. Consequently, PBT dipped 27.0 per cent q-o-q,” it said.
All in, despite the weak results, TA Securities maintained its ‘buy’ recommendation on the stock.
It said: “As one of the largest one-stop providers for pipes, valves and fittings (PVF) in Malaysia, we are sanguine on the long-term outlook of Pantech as Malaysia aspires to move up the value chain from basic to specialty chemical under the National Industrial Master Plan 2030.”