PETALING JAYA: Pantech Group Holdings Bhd
’s earnings momentum is expected to remain subdued in the near term, weighed by softer activity levels in the domestic oil and gas (O&G) sector and limited visibility on large-scale project rollouts.
TA Research said the lack of meaningful project flows would likely continue constraining demand, particularly for its trading division.
The research house said while Pantech’s exposure to non-O&G segments, such as petrochemicals, palm oil, water treatment, and shipbuilding provides some earnings buffer, contributions from these segments are unlikely to fully offset the weakness in core O&G-driven demand.
Cost and margin pressures are also expected to persist, amid elevated operating costs and an unfavourable product mix.
While the company continues to focus on cost discipline and operational efficiencies, TA Research expects overall earnings recovery to be gradual. This is pending a pickup in domestic project activity and clearer order book visibility.
Meanwhile, Phillip Capital Research alludes to softer domestic O&G spending continuing to weigh on earnings, primarily driven by a weaker trading segment performance.
It lowered its financial year 2027 (FY27) to FY28 forecast by 9% to 11% after incorporating lower trading revenue and margin assumptions.
The research house has maintained a “buy” call with a lower target price of 76 sen a share.
