Phillip Capital Research lowered its earlier FY26 revenue forecast by 10% due to weaker-than-expected trading sales.
PETALING JAYA: Pantech Group Holdings Bhd
’s earnings forecasts have been trimmed by two research houses on assumptions of margin pressure and possible softer stainless-steel average selling prices (ASPs).
TA Research trimmed its financial year 2026 (FY26), FY27 and FY28 earnings forecasts by 13%, 14% and 15% respectively, reflecting a 1% reduction in its profit after margin assumption due to softer stainless-steel ASPs.
Phillip Capital Research also lowered its earlier FY26 revenue forecast by 10% due to weaker-than-expected trading sales, which is largely offset by a 1% upward revision to its earnings before interest tax depreciation and amortisation (Ebitda) forecast from stronger than-expected margins.
“We left our core earnings forecasts unchanged,’’ Philip Capital said.
According to TA Research, the group’s earnings visibility remained supported by resilient global oil and gas capital expenditure, underpinned by sustained energy demand and continued reinvestment in brownfield assets.
Spending momentum is being driven by infrastructure upgrades, downstream capacity additions, routine maintenance activities, and decarbonisation-related initiatives.
“Management guidance points to a stronger first half FY27, with production expected to ramp up over the coming quarters as new upstream-driven projects commence, based on our latest engagement,’’ TA Research said.
It revised its target price downwards to 63 sen from 72 sen earlier, derived from a seven times 2026 earnings per share multiple.
It also downgraded its stock recommendation from “buy” to “sell” due to weak earnings delivery and earnings risk from a stronger ringgit.
“Expectations of gradually improving earnings in the first half of FY27 are already reflected in our current projections,’’ TA Research noted.
Phillip Capital Research, meanwhile, maintained a “buy” rating with an unchanged 12-month target price of 85 sen a share, based on a target eight times price earnings ratio multiple on FY27 earnings per share.
“The stock is currently trading at six times FY27 price to earnings ratio, which we believe has largely priced in near-term earnings weakness and offers an attractive risk-reward profile,’’ Phillip Capital Research said.
The key risks cited to its “buy” call include lower-than-expected demand for pipes, valves and fittings, unforeseen project delays and higher-than-expected operating costs.
Pantech posted a nine-month FY26 core net profit of RM47mil, which was within Phillip Capital Research’s expectations, but below market estimates.
The decline in earnings was mainly due to weaker-than-expected revenue and margin compression.
Nine-month FY26 revenue declined 11% year-on-year to RM670mil, driven primarily by a 24% decline in the trading segment, amid softer demand from domestic oil and gas and other industries.
