From left: M&A Securities Sdn Bhd deputy head of corporate finance Danny Wong, Swift Energy independent non-executive director Yee Kim Mei, independent non-executive director Zurul Ain Zulkarnain, executive director and chief operating officer Chin Saw Yong, executive director and CEO Tan Bin Chee, chairman Mohamad Nizar Idris, independent non-executive director Leong Choong Wah, corporate affairs director Suzana Abu Bakar, M&A Securities managing director Datuk Bill Tan and head of corporate finance Gary Ting
KUALA LUMPUR: The country's first initial public offering (IPO) of 2025, industrial services firm Swift Energy Technology Bhd, will continue to see plenty of upside, going by projections from analysts.
Making its debut on the ACE Market of Bursa Malaysia, the counter jumped 28.57% or eight sen over its IPO price of 28 sen a share to 36 sen a share at the start of Wednesday trading with an opening volume of 33.58 million shares. The share hit an intra-morning high of 38 sen a share.
Looking at the analyst coverage, Kenanga Research has an "outperform" recommendation on Swift Energy with a target price of 60 sen. Hong Leong Investment Bank (HLIB) Research, which has not rated the stock, has a fair value of 42 sen on the share.
Swift Energy is the only explosion proof (Ex) solar photovoltaic (PV) systems company in Asean, and one of only six globally.
According to Kenanga Research, the firm holds over 50% market share in the region's oil and gas industry.
Underlining its optimistic outlook for the company, Kenanga said it anticipated growth to come from Wilmar group's recovering investment in retrofitting plant and machinery, which has contributed 13%-24% to Swift Energy’s revenue since FY21.
Swift Energy stands to benefit from "explosive earnings growth", said the research firm, as Wilmar embarks on a spending spree at the cusp of a new four-year capex cycle, with retrofitting capex expected to triple to RM300mil.
Additionally, growing oil and gas investments in Southeast Asia are expected to drive the company's earnings in the coming years.
Citing research outfit Rystad Energy, HLIB said oil and gas development investments in SEA are projected to soar to US$30bil during the 2024-2025 period, a significant rise from US$9.5bil in 2022-2023.
"Additionally, SEA’s offshore gas production is set to unlock a US$100bil potential, supported by planned FIDs expected to materialise by 2028 — more than doubling the US$45bil FID recorded between 2014 and 2023.
"The growing investment presents a compelling opportunity for Swift Energy to capitalise on the trend, given its strong expertise in supplying ex-rated power distribution systems — a mandatory requirement in the O&G sector," it said.
HLIB added that Swift Energy also stands to benefit from stricter carbon emission restrictions in the APAC oil and gas upstream segment.
Meanwhile, Kenanga said PETRONAS is expediting project rollouts after initial delays in capex, noting a 26% quarter-on-quarter (q-o-q) jump in Swfit Energy's orderbook to RM70mil in 4QFY24, driven mainly by its Ex solar PV system.
"As PETROS finalises its gas agreement, PETRONAS is expected to ramp up spending by 2H25, alleviating capex reduction concerns and positioning Swift Energy for robust FY26 growth," it said.
